How to Choose a Certified Financial Planner
Building a trusting relationship with your financial planner is absolutely critical.
Your family deserves a qualified, responsible, and reputable financial advisor who will be managing your money based on your specific needs.
You’ll want to consider these tips when selecting a financial planner that will do his best to meet and exceed your individual needs. Your finances, as well as your personal security and peace of mind, depend on it!
Know What You’re Looking For
Most financial planners have a basic range of services they offer to clients, but some specialize or excel in certain areas. If these areas match the type of investments you’re interested in making, you’ll have a better match than other planners with less experience in those areas.
This is why it helps to know not only what financial planners do, but how they structure services accordingly to meet your needs, your budget, your expectations.
These are some of the major areas of personal finance that planners manage for clients:
- Retirement Planning – IRAs, 401K, Roth, and others
- Debt Management – Budgeting, saving money, emergency funding, early payoffs
- Insurance – Life, health, home, disability)
- Estate Planning – Mortgage, property, real estate
- Tax Planning
- Investment Planning – Stocks, bonds, securities, mutual funds
Create a List of Questions
It’s wise to have a list of questions prepared in advance of your initial interview with your planner to ensure the person will manage your finances with a level of competence and a rate of return that you’ll be comfortable with months and years later.
Keep in mind that some, but not all financial advisors are registered and/or certified with various agencies and organizations that adhere to stricter standards as professionals.
Though you will certainly have your own questions in mind, these suggested questions may be ones you’d like to include in your first consultation:
- What are your credentials?
- Do you hold any certifications or belong to any specific organizations like the Certified Financial Planner Board of Standards or the National Association of Personal Financial Advisors (NAPFA)?
- How long have you been practicing as a financial advisor, and in what areas are you licensed to do so?
- Do you have specific licensing with legal bodies like the Securities and Exchange Commission or the Financial Industry Regulatory Authority?
- Who is your ideal client and what are your strengths as a service provider?
- How are you compensated, and what is your standard fee schedule?
- Will I be able to review all transactions made, and how will our business relationship be structured?
- Do you have a list of references or performance indicators from successful relationships with other clients?
- Is there a record of any disciplinary or unethical practices in your history as a professional?
Gauge Their Business Personality
A final piece of the puzzle in finding a helpful financial advisor for your needs is to gauge the planner’s operating style and philosophy as a business associate.
During your conversation, you will likely be able to gather an initial impression of a particular planner’s approach and personality to his business and the style they prefer in making decisions for clients.
If at any time you feel uncomfortable or pressured into making a decision, feel free to end the conversation or leave the interview. The attitude a potential advisor shows during this all-important meeting can be enough to help you decide whether they are a good fit for helping reach your financial goals.
Finally, follow up their claims and expectations with some research of your own. A quick web search can sometimes provide details or testimonials on individuals that provide additional insight into their performance and reputation.
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