Ever wonder how a financial planner is different from a stockbroker? Stockbrokers are also seen as market mavens who trade stocks. Planners aren't accountants, either (although some accountants do work as financial planners) — they aren't called upon just to lower your tax bill and they aren't insurance agents who try to sell you complicated life insurance. They're not around only to urge you to buy specific mutual funds either. A financial planner should be familiar with a variety of techniques and tools, including trusts, if they are right for you.
Long-debated rules were supposed to go into effect to require your financial advisor to act in your best interests when advising you on your 401(k) and individual retirement account. However, the current administration has delayed the rules' implementation, and their future is uncertain. Meanwhile, however, every investor should know what certain changes could mean.
Don't just pick anyone who calls himself a "financial planner." Make sure you search for a Certified Financial Planner, a badge of achievement awarded by the Certified Financial Planner Board of Standards Inc., a nonprofit group that fosters professional standards in the largely unregulated world of financial planners. A CFP has completed an extensive course of study and passed tests on tax management, employee benefits, retirement planning, estate planning and investment management, among other subjects.
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