Reading and researching about personal finance is one thing, but there comes a time when you must make the extra effort to find and hire the services of a financial planner. Ideally, we should all consult with one, but there is a definite need for a financial planner that arises when you can expect an abnormal inflow or outflow of money in your life. These situations also involve emotional vulnerability, and women, especially in India, are prone to taking decisions that may not be in their interest during these times because of familial pressure or listening to misguided advice.
When Do You Need A Professional To Step In?
Hiring a Financial Planner is necessary when you are expecting or undergoing a substantial change in your life. This could be a potentially life-threatening disease, for example (and god forbid), cancer or a disease that require expensive treatments, like how renal failure requires dialysis. This could also be a divorce, a marriage wherein you won’t be able to work for a while or if you’re just looking to take a break from work. A Financial Planner is also necessary when you are faced with an inheritance following the death of a loved one, or any kind of sudden windfall that sees you with a considerable sum of money.
What Should You Look For When You Hire A Financial Planner?
The first and most important thing you need to look for is their educational qualification. Financial Planners should ideally have a CFP (Certified Financial Planner) qualification which is given by the Financial Planning Standards Board of India. There are a lot of Chartered Accountants who do financial planning but aren’t necessarily CFP holders – that isn’t to say they aren’t capable, but a CFP is preferred. However, if a Financial Planner comes to you by word of mouth recommendation, do consider them irrespective of the qualification, because if someone you trust or know recommends them, you know they’re good at their job. Your financial planner should also be someone you feel at ease talking to.
What Should I Seek Help For?
The primary areas that your financial planner can help you in are in the areas of tax, planning for the future and in setting up streams of alternate income, depending on the situation you find yourself in. If you’re coming out of a divorce, for example, and have an alimony or maintenance that is to be paid to you, your Financial Planner can help you channel that money in ways that is best suited for your needs. Financial Planners will also give investment advice, depending on what you’re saving for, like your child’s education or your own retirement.
A Doctor For Your Bank Account
A Financial Planner is essentially, a doctor for your bank account and just like you must be honest with your doctor to get the best treatment, you need to be honest with your Financial Planner as well. Be clear about your time horizons (whether you’re looking for help in the long term or the short term), the present state of your finances, your life goals and the amount of risk you’re willing to take. Finally, it’s important to state that the services of a Financial Planner might not come cheap, but it’s equally important to acknowledge that women manage many things simultaneously – careers, kids, homes – and so, when faced with a potentially life-altering situation, it’s easy to get overwhelmed and make poor decisions along the way. Hiring a Financial Planner will not only prevent those poor decisions and but also act an investment that you will make towards a secure future.
Rupee Rani is a weekly column on finance for women. Write to us with your queries at rupeerani@thenewsminute.com.