Parker - Here's why you need a financial adviser

You have an accountant; you have an attorney. Why do you need a financial planner? Because you could have serious gaps in your financial plan. Good financial planners have broad expertise they can use to devise a comprehensive plan that addresses all types of financial needs - insurance, investments, estate planning, retirement saving and estate planning.

A professional financial planner is a person you can rely on for one-stop financial care. Using a financial planner doesn't mean you have to give up your other advisers. Rather, your planner will work with your accountant, attorney and other advisers to coordinate your financial services.

After helping you identify your financial objectives, a planner will develop and implement a comprehensive plan designed to help meet all of your goals. Depending on your financial situation and goals, a financial planner may help you reduce estate taxes, increase retirement savings, maximize your investments with the intent of helping to preserve your money for future generations of your family.

Some financial planners help you monitor your assets. Others will recommend investments and help you implement them with the aid of other professionals.

Once your plan is in place, the planner will review it regularly and provide you with periodic financial statements. Whenever your personal life changes - you marry, have a child, switch jobs, or retire - or the financial markets change, your planner will update your plan to help ensure that you stay on track to meet your goals.

Choosing a planner

As you begin your search for a planner, ask for recommendations from people you respect, and interview potential planners to make sure the person you choose has an investment philosophy that is similar to yours, is responsive to your needs, and is knowledgeable.

It's also a good idea to do a background check of the planner's qualifications because you will be entrusting your hard-earned money to this person. Many planners have designations that indicate they have passed certain examinations and have pledged to maintain ethical standards.

CFP® (a registered certification mark) and Certified Financial Plannerª practitioner are marks that help you identify financial planners who are committed to competent and ethical behavior when providing financial planning services.

Each licensee has taken the extra step to demonstrate professionalism by voluntarily submitting to the rigorous CFP® certification process. In addition to significant education and experience requirement, a Certified Financial Plannerª practitioner must pass a comprehensive exam that tests personal financial planning knowledge and skills, continually update his or her abilities and abide by a strict code of ethics.

Fees versus commission

Financial planners use various methods to charge you for their advice. You should be comfortable with the method your planner uses. Fee-based planners charge a fee for their services. They also may receive commissions on financial products they sell to you.

Planning services may be charged as an annual retainer, an hourly fee, a percentage of assets under management, a fee, a percentage of income, or a combination of any of these.

In contrast, commission-only planners are compensated entirely by commissions from the providers of the products they recommend and sell. A commission-only fee arrangement may significantly increase your planning costs. You also risk a potential conflict of interest. When compensation is based solely on the financial products recommended, planners may not be providing objective advice. In addition, planners may be limited to using only the products they are commissioned to sell.

Fee-based financial planners may have ties to more than one insurer, mutual fund, security, or bank. They are free to choose from a full range of products in the financial services marketplace. If your aim is to find someone who will meet your needs and who will look after your interests first, then a fee-based financial planner probably is right for you.

Michael L. Parker, CFP, is a Certified Financial Planner practitioner in Sikeston with securities and advisory services offered through Lincoln Financial Advisors. He is a broker/dealer and Registered Investment Advisor. (mparker50@aol.com)