Choosing a Financial Planner That is Right for You

As you get older, your finances usually become more complicated. You have retirement accounts to manage, you may have accumulated significant savings that you’d like to start investing, or perhaps you have already started dabbling in the stock market but want some professional advice. A professional financial planner can do all of these things for you. The key is to find one that you trust and that understands your financial goals. Here are a few tips on choosing the right financial planner for your situation.


Consider Your Financial Goals

Why do you want to hire a financial planner? Do you want some help planning for retirement, for your children’s college education, or for your first home purchase? Keep your goals in mind when looking for a financial planner. Ask anyone you interview about whether they have helped clients with special projects like the ones you have in mind.

Look For a Certified Financial Planner (CFP)

When trusting someone with your money, you want to be sure they are qualified to do the job. A certified financial planner is someone who receives certification from the Certified Financial Planning board based on their education, experience, exam scores, and ethics. The criteria for certification are fairly extensive, requiring potential CFPs to have a bachelor’s degree in any field along with courses in all areas of financial planning, demonstrate mastery of the subjects in a ten-hour exam, and can prove they have experience working in the field.

Investigate Their Credentials and Professional History

When interviewing potential CFPs, you should both ask them directly about their credentials and professional history, and research them in the CFP database to learn about their current credential status and any past disciplinary actions against them. Ask your potential money manager if they have ever been convicted of a crime, what job experience they have that qualifies them to be a financial planner, and if they have any areas of specialty.

 Consider Their Pay Structure

CFPs work on different pay structures. Some are paid by the hour, and some charge a percentage of the money they are managing for you. Those charging an hourly rate are often starting off in the business and building their client list and are ideal if your financial planning needs are fairly simple. As your assets grow, you will likely need a more sizable amount of time from a CFP, and someone charging a percentage may be more economical for you. You’ll also want to know if they earn a commission for bringing customers to any particular financial plan.

Ask For a Sample Quarterly Report

A CFP should regularly report to you how your money is doing, and they often do this with a quarterly financial report. Ask to see an example of the type of report they would provide you with based on the services you are asking of them. A quarterly report should include summaries of all of the accounts monitored by the CFP including current balances, balance change over the last quarter, and a breakdown of how the balance change occurred whether through contributions made, interest earned, stock performance, or some other factor. Your quarterly report should be an easily understood snapshot of your financial landscape.

Ask For References

If you do nothing else, ask for and check references for your potential financial planner. If someone you know has used their services in the past and been happy with them, then that is a good indicator that the CFP is honest and does their job well. Customer review websites like Yelp are also useful, and the web can help you find a guide to high touch personalized service in financial and investment planning that will tell you what you should be able to expect from a financial planner.

Make Sure You Feel Comfortable With Them

Choose a financial planner who speaks your language and that you feel comfortable talking with. Money is a complicated and sensitive subject for most people, and a financial planner should be aware of this, especially when working with couples. An unspoken role of a CFP is to be a money therapist, and they should be prepared to counsel you through minor money disagreements.

These are a few points to consider when you are looking for a financial planner to help you get your finances on track for the future. For any candidate, check their credentials and history, check their references, know their services, and choose someone you trust. It is your hard-earned money, you want to entrust it to an ethical professional.