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How to choose the right financial planner

7 min read

How to choose the right financial planner

Written By

Ryan Priessman

Rounding it up

  • Financial planners can help you better manage their money to meet your financial goals, like planning for retirement.

  • There are different types of financial planners, each with their own list of pros and cons.

  • From estate planning to divorce financial analysis, financial planners specialize in different areas or services. Consider what areas you need help with before committing.

  • If you’ve decided to work with a financial planner, set up an initial meeting to ensure they are the right fit for you.

What do financial planners do?

Maybe you want to better manage  your money, but don’t have the time. Perhaps you want to start investing, but don’t know exactly where to begin. That’s where financial planners come into the picture.

A financial planner can help you meet your financial goals and assist with optimizing your spending, analyzing your current finances or budgetary constrictions, paying off debts through specific financial strategies, and more.

But do I need a financial planner?

It depends. Although most people can handle basic finances by themselves, it’s harder to plan appropriately for the future or to maximize monetary efficiency, especially if they have more complicated financial situations.

Financial planners are educated specialists who spend their time analyzing the finances of other people as a career. This provides them with a more comprehensive knowledge base, which could result in greater financial results for their clients.

Typically, you wouldn’t need a financial planner if you:

  • Are just starting out in life (i.e. teenagers or early 20s individuals)

  • Do not have many investments

  • Do not have bank accounts

But financial planners can be invaluable assistants if you:

  • Have complex financial portfolios, such as those with multiple income streams or businesses

  • Have a lot of savings or money tied up in investments

  • Are well-established in their careers looking to save more aggressively or purposefully for retirement or other financial goals

  • Need assistance saving for pricey occasions or purchases, like buying a house

Determining whether you need a financial planner is just the start. The deeper and perhaps even more important questions arise when it’s time to pick the right financial planner for your unique financial situation.

"Financial planners are educated specialists who spend their time analyzing the finances of other people as a career."

Determine what financial areas you need help

Before speaking to any financial planner, you should consider what aspects of your financial life you need assistance with. Financial planners don’t just provide basic economic advice — they can also assist with creating in-depth or long-term plans for things like retirement, paying down debt, and more.

Some big areas of financial life that could benefit from extra help include:

  • Retirement goals. Some financial planners can help individuals save to meet a target amount by their preferred retirement age

  • Saving for big purchases, like a house

  • Paying down debt. Financial planners can advise you on what loans or credit repair you could leverage

  • Establishing trust funds or preparing university tuitions for children

  • Solving tax problems, particularly if you’re an entrepreneur or a freelancer and has to navigate complex tax codes

It’s important to determine which financial areas need help; this will make it easier to pick the perfect  financial planner.

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Know what types of financial planners are out there

No two financial planners are the same. Some work for themselves, while others are part of larger organizations, and each comes with their own advantages—and disadvantages.

Financial planner vs financial advisor

Both financial planners and advisors seem to offer the same services; and sometimes, they do. But in many cases, financial planners and advisors have different focuses.

Financial planners often emphasize providing specific advice for their clients’ financial futures. They focus more on planning for retirement and helping individuals pay off debt through long-term plans. As a result, financial planners typically create specific programs that can help clients reach targeted goals.

Financial advisors, on the other hand, can offer more broader financial advice and can provide additional services, such as managing your investments and assets.

In-person planners

Most of the trained professionals in this industry work the traditional way as in-person financial planners. They include registered investment advisors (more on that below), wealth managers, financial consultants, and certified financial planners.

These planners meet with clients in-person and can come up with complex, long-term financial plans. They often provide the most technical and in-depth advice, but charge higher costs in return.

Many in-person financial planners who work for firms or larger agencies also require that new clients have a high minimum account balance, such as $250,000 of combined cash and assets.

Online Advisors

Online advisors are often more accessible and affordable than in-person advisors. Some online advising services can be quite comprehensive, matching clients with dedicated financial planners or teams.

But some online advising can be more limited than in-person advising. Planning sessions may be limited by time rather than by appointment and individuals may need to pay certain fees in order to access particular services. Still, online advisors are typically cheaper than many alternatives and do not always have high minimum account or net worth limitations, so they are more accessible to the general public.

A great example of a premium online planning service is KOHO’s Financial Coach. This in-app service gives users access to an expert who can help create personalized financial future plans.


Robo-advisors are cheap but can only provide very basic financial advice. They’re computer algorithms that answer questions posed through online portals or chat windows, teaching financial planning newcomers the basics with barebones guidance on certain financial topics.

Many budget-minded people opt to try out robo-advisors at first because fees are often quite low and they usually don’t require account minimums. But they cannot provide in-depth advice or help with more complicated financial situations and portfolios.

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Be aware of how the planner makes money

Those looking to hire a financial planner should also consider how that planner makes a profit. This can affect how they will provide their services and whether they’ll be a good match for certain needs.


Fee-based financial planners earn profits from services directly purchased by their clients. Their costs may show up as flat fees, hourly rates, or a percentage of any assets they manage for clients, such as stocks or other financial instruments.

The majority of fee-based financial planners are fiduciaries. They can be a great pick for many people since they have a vested interest in providing their clients with excellent financial plans and products so those clients will purchase more.


Commission-based financial planners can earn sales commissions from third parties, which often allows them to advertise their services as “free”. However, be aware that many financial planners who earn commissions get some or even a majority of their income from selling products to their clients. Many less-than-reputable planners with this business model push products or subscriptions onto their clients as a result.

This type of financial planner includes any stockbrokers or stock agencies, which often take charge of their clients’ investment portfolios in an attempt to make their own profits.

Registered Investment Advisors

A financial planner may also be a registered investment advisor, or RIA. RIAs are specialized companies that provide specific financial advice for long-term investments, usually with goals like hitting a target retirement amount or saving up for a big purchase.

Many of the best RIA companies have credentials that mark them as certified financial planners or CFPs. These are trustworthy organizations because those working for these companies must have passed certain industry exams and have years of planning experience before taking on clients.

"However, be aware that many financial planners who earn commissions get some or even a majority of their income from selling products to their clients."

Consider the financial planning services needed

Any given financial planner will only specialize in a few different fields or services. You can save time and money by considering which services you need before selecting a planner.

  • Retirement planning services – assist individuals to prepare for and manage nest eggs before and during retirement

  • Estate planning services – help estate owners manage their assets and estates for beneficiaries

  • Wealth planning services –  are most often used by individuals with high net worth to manage their wealth

  • Certified exit planning – helps business owners to exit or sell a business

  • Certified financial transition services – help individuals get through major economic transitions, such as a divorce, the loss of a house, or selling a business

  • Certified divorce financial analysis services –  useful for those going through a divorce and have assets to divide

Interested in a financial planner? Set up an intro meeting

When browsing different financial planners or planning institutions, it can pay to set up a consultation or initial meeting, if they’re offered. Financial planners are typically interested in working with clients for a long time, so they will most often be happy to meet with a prospective client so both parties can see if doing business would be a good idea.

Set up an initial meeting so you can determine whether the financial planner in question:

  • Knows how to help with their unique financial goals

  • Has the experience and tools necessary to get the job done

  • Is affordable

  • Will not push unnecessary products or services on the client

Always do a background check

Lastly, it’s always a good idea to do a background check with any financial professional. This can be as simple as looking up the financial institution or individual in question to see their professional record.

Remember to also check their online reviews which often offer key information about registered brokers, such as how long they have been working in the industry, whether there have been any past complaints about their services, and more.

Ultimately, financial planners can provide valuable advice and other services for those needing assistance managing their investment portfolios or general finances. But it’s important to hire the correct financial planning firm or analyst for your unique needs – it’s the only way to guarantee that the advice you receive is worth your time and money!

Note: KOHO product information and/or features may have been updated since this blog post was published. Please refer to our KOHO Plans page for our most up to date account information!


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