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Do I need a financial planner?

I am not sure if I should go to a financial planner but some of my friends have done so and I am afraid that my unwillingness to spend money on advice could end up being a case of false economy. But on the other hand, I am afraid of being ripped off. I earn around $100K a year and my wife earns around $80K but in a few years time she will leave work for some time to have kids. We have a $400K mortgage and we are paying this off at a faster rate than the bank expects us to. What is your advice?

You didn’t give your age but I’m guessing you’re around your 30s given your wages, debt and the fact you have no children. Given your wage levels and assuming you have not made yourself into a do-it-yourself financial adviser, it could be a good idea to have a set of objective eyes run over your goals and what you’re doing to make it happen. I maintain that most people can benefit from at least one visit to a trustworthy adviser, as there are a lot of unknowns out there ranging from investment alternatives to tax rules to varying strategies that can differ from person to person. These different strategies and products can have a big difference on the wealth you build over time. The big challenge is to find a great adviser and I would recommend asking for referrals from friends, family and professionals you know, such as an accountant. But please don’t just trust their judgement — test it. Make sure you are told how much you will pay and what other compensation your adviser might receive. Also don’t presume you have to sign up for ongoing service, which can be pushed. Mind you there are plenty of people who should, but some younger people with plans to buy a house and pay it off might not need regular service. The big problem is that your first plan is not tax deductible but ongoing service is and that can mean some planners will push it when it might not be appropriate. On the other hand, some people can really benefit from regularly talking to their adviser and so it depends on your circumstances, goals and strategies to build wealth.

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice. 

Published on: Friday, May 07, 2010

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