Financial planning is not rocket science and the terms used are not totally foreign. Why would someone who is educated need a financial planner then? The answer is simple, they remove the emotion that most investors experience. They act as your buffer to execute your plan nothing more. Well they can also advice you as to how to own certain assets or when to rebalance to maintain harmony with your plan so they do have a place and do serve to fulfill many aspects of your financial needs. Find one you trust, be honest with them, expect them to be honest with you, and always communicate with one another.
On that last point, communication. It is important that you and your planner are on the same page from the beginning. If your planner uses terms you are not familiar with stop them right then and have them explain it further. The same goes with investments if you do not understand something they propose you include in your plan ask them for further explanation or clarification. Planning does not have to be confusing and planners do not have to use big words to explain simple ideas when a simple term will work just as well.
While your planner may need to understand the big and confusing words because they have regulations to follow they should be able to condense these topics and ideas down into simpler terms for their clients. Also it is important that a planner make it know to you as the client that they are looking out for your best interests and are not just in this to make their money. Granted they are not preforming these duties for free but be leery of planners who seem to avoid fees and commissions. Yes that is how we make our money and like anyone who provides someone with a service we deserve to get paid but there has to be total transparency in this aspect of the relationship. They should show that they care about you and your needs above what they want you to do. You are their client and they work for you. It is wise to remember that and use planners that remember that as well.
Remember all investors generally have access to the same information. Be leery of an advisor who claims to have a system or knows of a manager that is beating the averages. Chances are they do not have a legitimate system and yes that manager may have been doing good but chances are that is old news. As a planner never assume that your clients understand all the technical terms and try to use the simplest ones that will still convey your message. And as clients of planners never be afraid to ask a question, that is what your planner is there for. To answer that and any other question you may have.
