A financial planner can help with investments, insurance, estate planning, budgeting, retirement planning, saving for college, tax planning/prep, and other money topics.
One way to get a sense is to look at this Certified Financial Planner topic list.
Another idea is to look at this book (my favorite I've read) which covers roughly a similar topic list in a concise form:
It could not hurt at all to read that before deciding to visit a planner, so you have baseline knowledge.
By the way, look for the CFP certification which is a generalist certification. A CFP might also have a deeper cert in certain topics or connect you with someone who does. For example:
- someone with a CPA or Enrolled Agent certification could help with taxes (note: your average tax prep place just has people who know how to type into the computer program, they have minimal expertise; a CPA or EA does have expertise)
- an estate planning lawyer would be an expert on setting up beneficiaries, writing your will, trusts, etc.
- a Chartered Financial Analyst (CFA) would be an investment expert
- there are insurance certifications and retirement plan certifications also
- there are garbage certifications that mean very little out there ... I've tried to mention some that mean something
You really want a generalist (CFP) who may have an additional credential as well. The idea is to holistically look at what you're trying to accomplish and all finance-related areas. Especially because there may be tradeoffs. The CFP would then refer you to or work with lawyers, accountants, etc.
Importantly, some advisors are fiduciaries (must act in your interests) and some are not. In particular many stockbrokers are neither qualified planners (no CFP or equivalent) nor are they fiduciaries. Stay away.
There are several models for paying a financial planner, including:
- loss-leader for an institution like Fidelity or Vanguard. If you have enough money with them they may give you free or discounted planning. They will of course always pick investments offered by their company, which is probably OK for say Vanguard and pretty bad for some other companies. Also this is probably on the phone, not in person, if that matters to you.
- commissions. (or a mix, "fee-based"). These planners are in part salespeople, for either investments or insurance or both. I'd stay away but some people are comfortable with it.
- percentage-of-assets fee-only. These planners get a fee from you, but as a percentage of investment assets managed. This creates an overemphasis on investing perhaps, though arguably an incentive not to lose your money, too. It also comes out to kind of a lot of money. One advantage is someone is doing rebalancing and other "investment maintenance" for you. This can be good if you lack the time and willpower, as many of us do.
- hourly fee-only. Like many lawyers and CPAs, just charge you for time spent. This money will be a more visible check you have to write but is probably cheaper than percentage of assets over time. But you don't have someone managing your money for you, this is more of a "get advice, then DIY" approach. There's a franchise Garrett Planning Network that has this kind of planner.
There's an organization called NAPFA (napfa.org) for fiduciary non-commission-based planners. Membership there is a good thing to look for since it's a third party that defines what fee-only means and requires the no-commissions/fiduciary standard.
Finally, the alternative I ended up choosing was to just take the CFP course myself. You can do it online via correspondence course, it costs about the same as 1 year of professional advice. I also took the exam, just to be sure I learned the stuff. This is the "extreme DIY" approach but it is cheaper over time and you know you are not going to defraud yourself. You still might do things that are counterproductive and not in your interests, but you know that already probably ;-) Anyway I think it's equivalent to about a quarter's worth of work at a decent college, or so. There are about 6 textbooks to dig through. You won't be an experienced expert at the end, but you'll know a lot. To get an actual CFP cert, you need 3 years experience on top of the courses and the exam - I haven't done that, just the book learning. Someone who puts "CFP" after their name will have the 3 years on top of the training.
Some editorial: many planners emphasize investing, and many people looking for planners (or books on finance) emphasize investing. This is a big mistake, in my view. Investing is more or less a commodity and you just need someone who won't screw it up, overcharge, and/or lose your money on something idiotic or inappropriate.
Some people are in plain-bad and inappropriate investments, don't get me wrong. But once you fix that and just get into anything decent, your biggest planning concerns are probably elsewhere.
- Some big picture understanding of your life goals and how money fits into them and what you need to do to get there.
- Few people are properly insured. (Disability, life, umbrella, etc.)
- Budgeting, spending, and saving.
- Estate plan, at least a will and setting up proper beneficiaries on retirement accounts and insurance policies. Especially if you have kids, this is must-do.
- Getting all the tax benefits you can, especially if self-employed or you own a business or real estate.
On investments, I'd look for a planner to just get you out of overpriced annuities and expensive mutual funds you may have been sold (anything you were sold by a salesperson is probably crap). And look for them to help you decide how much to invest, and how much in stocks vs. bonds. Those are the most important investment decisions.