Is it a Mistake Not to Hire a Financial Planner

Paying for college has become the number one financial concern among parents of young children. Four years of tuition 18 years from now will likely cost more than your familyï ¿ ½s first home. But figuring out just how much you will need to save can be a challenge. Your childï ¿ ½s total college costs will depend on a variety of factors, including their age, type of school, location, whether or not they will live on campus and if scholarships are in their future. When it comes to planning, some families prefer to endure the journey alone, but others are willing to pay for professional guidance. DIY college planning may work for some, but hereï ¿ ½s what you might be missing out on: 1. Access to more investment products If your child is young, or perhaps not even born yet, an easy way to start preparing for their college education is to open a 529 plan. You can enroll in some 529 plans directly but others can only be purchased from a financial advisor. Although your advisor may earn a commission by selling you a certain plan, he could also recommend that you open a direct-sold plan if he thinks itï ¿ ½s a better fit. According to this yearï ¿ ½s College Savings Survey, only 28 percent of parents who currently save in a 529 plan said they used a financial advisor to shop for one. The top three reasons for not working with an advisor were that they were comfortable researching and understanding investment options on their own, they didnï ¿ ½t want to pay commissions and they were concerned about hidden fees or costs. What is a 529 plan? 2. Help with selecting a savings vehicle Almost every state offers a 529 plan and there are hundreds of different investment options to choose from. A financial planner who is familiar with college savings plans and the investment managers who run them will be able to help narrow down your choices. If youï ¿ ½re already working with an advisor who knows your investment goals and risk appetite youï ¿ ½ll get an even more personalized recommendation. Even if youï ¿ ½re working with a fee-based independent advisor he or she can still help recommend an appropriate direct-sold plan. 3. Evaluating the schoolï ¿ ½s expected ROI Most families are comfortable with the idea of supplementing their college savings with some student loans, but no one wants their children to be crippled with excessive debt. A financial planner can help you evaluate your childï ¿ ½s choice of school and the expected return on investment to ensure that theyï ¿ ½ll be able to afford the future loan repayments. This includes researching tuition costs as well as expected starting salaries for the studentï ¿ ½s desired field of study. Youï ¿ ½re saying my financial advisor can help me plan for college? 4. Finding scholarships and grants According to Sallie Maeï ¿ ½s How America Pays for College 2014 report, undergraduate students paid for 31 percent of their total college costs with grants and scholarships. Whatï ¿ ½s more, 38 percent of students from households with incomes over $100,000 received scholarships. So even if you are a high earning family, thereï ¿ ½s a good chance you will be able to get some sort of scholarship. Todayï ¿ ½s financial planners play a large role in helping families uncover opportunities to cut down tuition costs. 5. Maximizing financial aid eligibility According to the 2011-2012 National Postsecondary Student Aid Study (NPSAS), around 2 million students missed out on receiving a Federal Pell Grant simply because they failed to complete a FAFSA. Thatï ¿ ½s right, these families gave up a chance to receive money for college that they wouldnï ¿ ½t have had to pay back! The FAFSA is a highly complex form. So much so that the President is taking major steps to simplify the financial aid process. Remember that federal financial aid is first come first serve, and if you make a mistake on your FAFSA youï ¿ ½ll have to make a correction and re-submit. For families who donï ¿ ½t feel comfortable filling out this complicated form alone, who better to ask for help than their financial planner, who already has a complete picture of their household finances? 6. Aligning your investments Do you currently work with a financial planner to manage your retirement account and other investments? If so, it might make sense to involve them in your college planning process as well. You may even qualify for a discounted sales charge if your investments within the same fund family reach certain breakpoints. For example, this could happen if you have an IRA, a brokerage account and a 529 plan all in the same fund family purchased through the same financial advisor. 4 reasons to buy a 529 plan through a financial advisor Paying for college has become the number one financial concern among parents of young children. Four years of tuition 18 years from now will likely cost more than your familyï ¿ ½s first home. But figuring out just how much you will need to save can be a challenge. Your childï ¿ ½s total college costs will depend on a variety of factors, including their age, type of school, location, whether or not they will live on campus and if scholarships are in their future. When it comes to planning, some families prefer to endure the journey alone, but others are willing to pay for professional guidance. DIY college planning may work for some, but hereï ¿ ½s what you might be missing out on: 1. Access to more investment products If your child is young, or perhaps not even born yet, an easy way to start preparing for their college education is to open a 529 plan. You can enroll in some 529 plans directly but others can only be purchased from a financial advisor. Although your advisor may earn a commission by selling you a certain plan, he could also recommend that you open a direct-sold plan if he thinks itï ¿ ½s a better fit. According to this yearï ¿ ½s College Savings Survey, only 28 percent of parents who currently save in a 529 plan said they used a financial advisor to shop for one. The top three reasons for not working with an advisor were that they were comfortable researching and understanding investment options on their own, they didnï ¿ ½t want to pay commissions and they were concerned about hidden fees or costs. What is a 529 plan? 2. Help with selecting a savings vehicle Almost every state offers a 529 plan and there are hundreds of different investment options to choose from. A financial planner who is familiar with college savings plans and the investment managers who run them will be able to help narrow down your choices. If youï ¿ ½re already working with an advisor who knows your investment goals and risk appetite youï ¿ ½ll get an even more personalized recommendation. Even if youï ¿ ½re working with a fee-based independent advisor he or she can still help recommend an appropriate direct-sold plan. 3. Evaluating the schoolï ¿ ½s expected ROI Most families are comfortable with the idea of supplementing their college savings with some student loans, but no one wants their children to be crippled with excessive debt. A financial planner can help you evaluate your childï ¿ ½s choice of school and the expected return on investment to ensure that theyï ¿ ½ll be able to afford the future loan repayments. This includes researching tuition costs as well as expected starting salaries for the studentï ¿ ½s desired field of study. Youï ¿ ½re saying my financial advisor can help me plan for college? 4. Finding scholarships and grants According to Sallie Maeï ¿ ½s How America Pays for College 2014 report, undergraduate students paid for 31 percent of their total college costs with grants and scholarships. Whatï ¿ ½s more, 38 percent of students from households with incomes over $100,000 received scholarships. So even if you are a high earning family, thereï ¿ ½s a good chance you will be able to get some sort of scholarship. Todayï ¿ ½s financial planners play a large role in helping families uncover opportunities to cut down tuition costs. 5. Maximizing financial aid eligibility According to the 2011-2012 National Postsecondary Student Aid Study (NPSAS), around 2 million students missed out on receiving a Federal Pell Grant simply because they failed to complete a FAFSA. Thatï ¿ ½s right, these families gave up a chance to receive money for college that they wouldnï ¿ ½t have had to pay back! The FAFSA is a highly complex form. So much so that the President is taking major steps to simplify the financial aid process. Remember that federal financial aid is first come first serve, and if you make a mistake on your FAFSA youï ¿ ½ll have to make a correction and re-submit. For families who donï ¿ ½t feel comfortable filling out this complicated form alone, who better to ask for help than their financial planner, who already has a complete picture of their household finances? 6. Aligning your investments Do you currently work with a financial planner to manage your retirement account and other investments? If so, it might make sense to involve them in your college planning process as well. You may even qualify for a discounted sales charge if your investments within the same fund family reach certain breakpoints. For example, this could happen if you have an IRA, a brokerage account and a 529 plan all in the same fund family purchased through the same financial advisor. 4 reasons to buy a 529 plan through a financial advisor