A financial advisor is a professional who tells a client how to save or invest money. He uses his skills and knowledge to create a personalized financial plan.

Retirement planner (1)

A retirement planner is a person who offers a specialized suggestion on funds distribution. A qualified retirement planner has a set of professional skills that encompasses something more than financial planning and advice. He is a subset of financial planners, who has skills in retirement issues such as social security benefits and retirement account withdrawals. According to the fee structure, retirement planners have three categories. One who charges on an hourly basis, second who has flat fee rates, and third who works on commission. There is another category that is a hybrid of commission-based and fees-based retirement planners.

Working of a retirement planner

Just like a financial planner, a retirement planner also needs to understand carefully the financial goals of the client. He must know when the client needs his saving and where he wants to spend. Moreover, he must understand that the client’s accumulated financial assets and other resources like part-time work, social security, home equity, pensions, etc., are elements of a puzzle that must be placed in the appropriate place to get fruitful results. This helps the client in the form of monthly paychecks after his retirement. The planning of this regular income requires a comprehensive knowledge of retirement plan rules, social security, and taxes. Such knowledge is gained after years of training and experience.

What type of advice one can have from a retirement planner?

A retirement planner can advise a client on any of the following matters:

  • When and how to take social security benefits
  • What choices associated with pension distribution are appropriate for the client
  • Whether an annuity is an appropriate investment for the client or not
  • Which accounts are suitable for withdrawals
  • How much to reduce the retirement taxes
  • The expected amount of retirement revenue the client can have
  • Appropriate withdrawal rates while withdrawing cash from a traditional portfolio
  • The amount of cash that should be in authentic investments
  • Types of taxable revenue generated by investments
  • Whether reverse mortgage option is good or not
  • Whether long-term care insurance is needed or not

A good retirement planner does not make any suggestions without understanding the expected time duration, client’s goals, investment experience of the client, and the tolerance level of the client while taking the risk of investment.

How to find a good retirement planner?

While interviewing the potential planner, one must seek his expertise in social security, tax planning, and retirement withdrawal strategies. He must be able to generate a plan and timeline that tells the tax-efficient way to take out money. Another choice is to check out Retirement Income Industry Association (RIIA). This group gives a designation known as Retirement Management Analyst (RMA). A retirement planner with such designation is considered highly specialized and skillful in his field.

Who is a certified financial planner?(2)

A certified financial planner is a person who has gained a formal identification from the Certified Financial Planner Board of Standards.  He aids a person in several areas of financial management such as insurance, education, taxes, investing, and retirement. In terms of financial advisors, becoming a certified financial planner is a stringent and difficult process. It requires successful completion of exams, years of experience, a formal education, and a presentation of ethics. The crucial aspect of CFP is his fiduciary job, which means he must create a plan according to the interest of the client.

What does a CFP do?

A CFP begins the process by the evaluation of current revenue including properties, investments, cash, and assets, to have an idea of the net worth of the client. He also considers liabilities of the client such as student debt or mortgages. From this point, he starts working with the client and his needs to create an appropriate financial plan. For instance, if a person is going to retire, a CFP will design a plan for his retirement years. Or if a person wants his child to study in college then a CFP will design a plan to regulate the expense.

A CFP is a subtype of a financial advisor with a certified designation demonstrating his more knowledge and skills regarding financial planning.

How to become a CFP?

If a person wants to become a CFP he must meet the criteria of the following four areas:

  • Formal education
  • CFP exam performance
  • Working experience in the relevant field
  • Demonstrated professional standards

The education area has further two main components:

  1. A verified bachelor’s degree from an institution recognized by the U.S Department of education
  2. A completed list of courses indicated by the CFB board

The latter requirement is waived if the aspirant has certain financial designations like Certified Public Accountant (CFP), Chartered Financial Analyst (CFA), or has a higher business degree like Master of Business Administration (MBA).

Pros and cons of a financial advisor


  • Offers a valuable advice

Financial advisors find this a most rewarding job. Consumers get confused and overwhelmed regarding which insurance or investment vehicles are suitable for them. Here a financial advisor provides his valuable suggestions to the client for fruitful results.

  • Flexibility in work schedule

In every new career, it is difficult to create a balance between professional and personal life. However, once a client base is established, the career of a financial advisor lends itself to flexibility in duty times. Seasoned advisors can schedule the client meeting according to their availability.


  • High-stress field

Financial advisors might deal with stress while starting their careers. They continuously manage clients’ emotions during downturns in the market. This ultimately causes stress to advisors.

  • Continuous prospecting

Many advisors leave this field due to the wastage of money and time they spent to create and maintain efficient prospecting systems. Creating a book of business is the most challenging thing for a newcomer.


  1. https://www.thebalance.com/what-will-a-good-retirement-planner-do-for-me-2388434
  2. https://www.investopedia.com/terms/c/cfp.asp