written by | April 15, 2022

What Is a Financial Planner and How to Choose the Right One?

Money is vital, more than we pretend it isn't. It is the heartbeat of our community, the purpose we wake up every morning, and the purpose we leave our houses. Okay, that seems a little gloomy. There is, obviously, love, family, companionship, and joy. But, whether we accept it or not, wealth is essential for our well-being. The issue is that handling your finances can feel overly complicated and demanding for the ordinary person, particularly when life throws you knuckleballs. Financial planners can assist you in sorting all of the tough choices that occur with setting long-term savings objectives and teaching you how to handle your funds responsibly and strategically.

Did you know?

FINRA is dedicated to protecting investors and safeguarding market integrity to facilitate vibrant capital markets. 

Drafting a Basic Financial Plan and the Need for Financial Planning

What Is a Financial Planner?

A financial planner is a licensed financial or investment counsellor. They offer expert advice to their customers on assets, insurance, taxation, asset tracking and retirement funds. A financial adviser gives people advice on how to handle their money. They can work for a company or on their own. Financial planners often engage with retirement savings. Financial planners advise on different objectives such as school, automobile or home finance, including spending control, forecasting, mortgages, bank debt and investments.

Should You Be a Financial Planner?

A career in basic financial planning is highly gratifying in every way. Assisting individuals in planning and achieving their life objectives via various financial instruments provides immense gratification, a good career and income possibilities. It offers a wide range of clients and the capacity to operate for a larger or smaller company anywhere worldwide. For far too many, engaging face to face with people and accomplishing goals provides the most joy.

Understanding the Role of a Financial Planner

A financial planner's major duty is to help customers create personal budgets, set saving goals. They also help you minimise, control and manage to spend and take the required actions for developing and increasing wealth. Financial advisers collaborate with money managers, collective investment schemes and counsellors to suit the economic needs of their customers.

A financial planner's job needs them to stay up to date on tax laws, financial instrument advancements and personal finance methods for retirement and real estate. As a result, they should likewise be adept at selling. They will have to acquire new customers and be creative in devising methods to enhance their customer's financial circumstances and guarantee that customer will accomplish all their goals.

A financial planner's responsibilities typically involve:

  • Delivering customers with finance and insurance solutions.
  • Guarantee sensible customer records.
  • Creating and maintaining connections with customers.

By staying current on the clients' accomplishments and interacting with necessary adjustments, they influence their economic condition on a regular schedule. They also liaison between customers and other financial specialists, providing regulatory, estate, and individual tax preparation advice.

Also Read: How to start your own Consultancy Firm in India?

The CFP Designation

The first stage in becoming a Certified Financial Planner is obtaining both CFP and QAFPTM certifications. Certified Financial Planner is a professional designation course. It is six months to two years long, and the Financial Planning Standards Board provides it and teaches the subject of FPSB.

Fee-Based vs. Commission-Based Financial Planners

It would help if you choose a financial planner whose pricing strategy is compatible with your requirements. There are two categories of financial consultants to consider in capital management.

1. Commission-Based Financial Advisers

A commission-based financial counsellor is a straightforward notion.The payment is solely dependent on commission, just like a car dealer. It simply implies that the payment is in the form of commissions on monetary operations or items. In other words, the more they accomplish, the more they earn. The majority of commission-based financial consultants work for large corporations. 

However, this might be deceiving. Customers may believe that an adviser at a large business has exceptional resources, although they are more akin to freelancers. While their business offers some operational assistance, advisers often earn very little to no base income from the company.

Another important consideration is that there are no compulsory commission-based consultants that are fiduciary. What does this indicate? It implies that advisers can offer items while stating that they have the smartest idea for your investment, even if they do not. In this regard, they have no legal liability to their customer. It implies that there is no requirement of declaring any conflicting interests, and their primary responsibility is to their company.

2. Fee-Based Financial Advisers

 A fee-based financial planner is usually compensated in one of 2 directions: a retainer's charge or hourly pay. A fee-based consultant makes much more sense when struggling to control a big portfolio. They don't offer a one-time fixed service and are constantly available to evaluate your business. It's the distinction between an occasionally good relationship and a stable long-term relationship.

Fee-based advisers, unlike commission-based consultants, have a contractual responsibility to their clients. It is fantastic for you as a customer since they have to provide the best economic goals for you. A fee-based consultant cannot promote you to an investment scheme that is inappropriate for your requirements. While fee-based advisors often charge a higher fee, you are purchasing their time and dedication to your business. A one or two-percent yearly fee for asset management is pretty usual. Therefore you must ensure that you have a use for this sort of adviser.

Choosing the Right Financial Planner

Choosing the correct financial adviser for your position is critical. You can ensure that you don't end up paying for solutions you don't require. Also, you don't have to deal with a planner who isn't a suitable fit for your economic targets.

Knowing What Financial Services Do You Need

Ask yourself the following questions to determine why you're searching for financial assistance:

  • Do you require budgeting assistance?
  • Do you need assistance with your investments?
  • Do you want to make a financial plan?
  • Do you have to update your business plan or set up a foundation?
  • Do you require tax assistance?

Answering the above questions will help you decide which adviser you must choose.

Also Read: 10 Tips for Successful Money Management for A Profitable Business

Learn Which Financial Advisers Have Your Back

Financial advisers are known by various titles, including financial planners, brokers, professional financial consultants, financial educators and asset managers. So, who does what, and on whom can you rely on.

Because some of the most frequent names used by advisers, such as financial advisers, aren't related to any particular qualifications, don't presume that somebody who employs a classic title would have any special training or qualifications. Anyone who provides investment services has to complete registration as a financial adviser. The certificate is with either the SEC or the jurisdiction, depending on the number of assets under administration.

Learn About Financial Adviser Options

Financial advisers aren't merely accessible in your local bank or advice office. There are several methods to obtain financial guidance. The right choice for you will most likely be determined by your particular tastes, the solutions you require and your income.

1. Robo-Advisers

It is a virtual service that simplifies and lowers the cost of financial management. You complete questionnaires online, and computer simulations create an investment portfolio based on your objectives and risk appetite. A digital financial advice service provides a remote and human connection to financial counsellors.

2. Online Financial Planning Services and Advisers

A simple online service may provide the same automatic asset management as a Robo-adviser and the option to communicate with a group of financial analysts if you have queries.

3. Traditional Financial Advisers

Traditional or standard financial advisers may visit you in reality and assist you with almost all financial management requirements.


A licensed financial adviser will assist you in ensuring that the firm's finances and assets are in excellent order. The synchronisation of these two is important for working capital, investments and tax considerations. Keep in mind that the finest financial counsellors are those who have good intentions at heart. For a similar reason, you should contact trustworthy franchises to keep your financial condition on the right path.

Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.


Q: How frequently must one evaluate the investment plan?


A financial plan is created with all possible future events in mind. As a result, there is no requirement to evaluate your plan only once a year.

Q: When I employ a financial planner to handle my money, who will have the ownership of it?


All of your assets will still be in your name, and you'll be able to follow them digitally.

Q: Why do I need to provide you with so many personal details?


Consider seeing your doctor. Your physician cannot suggest the correct plan of action unless you provide accurate and detailed information. The same is true for financial planning, and you have to reveal the complete details for getting the finest treatment for your "financial health."

Q: What is the point of making a financial plan?


Financial planning gives purpose and direction to your investment choices. Purchasing a certain investment scheme may assist you in saving enough money to fund your children's university education. You can also adjust to life situations more readily and remain certain that your objectives are on schedule. Financial planning enables you to comprehend how each economic choice impacts other aspects of your budget.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.