Smart Military Money
Personal finance tips andadvice for the military lifestyle.
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Finding a trusted financial adviser is increasingly important for military members and their families.
Financial advisers can help service members plan for the future, build a retirement nest egg and evaluate major purchases, including a home purchase.
But it’s also important to hire a professional who understands the unique needs and demands of military life.
Here’s a look at a few key things to consider:
There are many types of financial advisers, although the most common are financial planners, stockbrokers and specialists. And depending on your situation, your selection of a financial adviser may be pretty straightforward once you understand the differences between the three.
This is the type of adviser you seek out for general financial advice. This can consist of advice regarding retirement options, investment choices, insurance selection and even estate planning. But we wary; anyone can hang a shingle to lure in unsuspecting patrons. Don’t let that be you. Choose a Certified Financial Planner (CFP).
When people typically think of a financial adviser, a stockbroker is what comes to mind. Stockbrokers, also known as investment managers, work to maintain the best possible return on your investment. Stockbrokers are usually for those with a substantial amount to invest, usually $50,000 or more. This is because the fee to trade stocks can range from $100 to $200. There are online discount brokers who charge a significantly lower fee, generally less than $10 for an online trade.
While going to a general financial planner usually works, there are other areas of expertise financial advisers dedicate themselves to. If you’re looking for someone to handle a unique situation a specialist is often your best choice.
There are many different qualifications that an adviser may seek to obtain, but the most prestigious and trusted certification is to become a CFP.
Certified Financial Planners have undergone intensive training, which includes challenging exams and a significant amount of work, before the Certified Financial Planner Board of Standards certifies them. The CFP is a good sign that a financial planner will give sound financial advice, according to the Wall Street Journal.
Additionally, they must maintain and continuously update their skills as a CFP in order to maintain their certification.
Financial advisers typically charge different fees based on the clientele they wish to work with. Depending on your needs, this alone may be a deciding factor on who handles your finances.
If you’re just starting out and have very little savings, a financial planner who charges by the hour may be the best bet. In this situation, you’ll receive a one-time meeting with an adviser and it’ll be up to you to make an appointment for future consultation, according to Jane King, a financial planner with Fairfield Financial Advisors.
When considering pay structures, you may want to avoid financial advisers who work on a commission. They may have less than altruistic incentives to push certain products your way.
Photo thanks to kenteegardin under a creative commons license from Flickr.
One Comment
Good info, unfortunately most soliders do not have much in the way of investable assets, and most fee based advisor’s will have minimums, usually 50k on up as a minimum investment portfolio. Most small investors, unfortunately, will have to settle for commission oriented advisors, as these types of investments can be purchased with perhaps just hundreds of dollars. Your readers are generally not the rich and famous; and while recommending to them to seek the very best in guidance, in most cases it will not be available to them; and what is you bashed. An advisor can offer commissioned products and still do the moral and decent thing for a client.