How to Find a Good Financial Planner

Selecting a certified financial planner is one of the most important money decisions you’ll make. Here are the steps for finding a great one.

1. Consider Your Priorities

Nick Bormann, a CFP in Spokane, Wash., says that advisers tend to specialize in a particular type of financial advice or focus on groups of clients with similar financial issues—teachers, tech execs, middle-class preretirees, etc.

So begin your search by identifying your key needs and goals. If you want to dig yourself out of debt or boost your savings as you approach retirement, seek someone with experience tweaking budgets and coaching clients to live within them. If you’ve built up a nest egg but don’t know if it’s enough to maintain your lifestyle through retirement, choose a planner with experience projecting out long-term financial plans and allocating savings among types of retirement investments.

2. Identify Planners Who Fit Your Needs

Almost anyone can call themselves a financial adviser. And there’s a confusing array of formal accreditations, with an alphabet soup of abbreviated titles to match. For simplicity’s sake, you really only need to know one: CFP, or certified financial planner. You can count on a CFP to have completed extensive training and passed a rigorous exam, and to be able to advise you on a wide range of financial areas. Special titles, some more meaningful than others, often get layered on top, such as certified college funding specialist (CCFS).

You can find CFPs in your area by specialty at FPA PlannerSearch, the National Association of Personal Financial Advisors, the Garrett Planning Network, and the XY Planning Network. Those websites list only planners who are so-called fiduciaries, which means they’re obligated to put your financial interests above their own. To be extra sure, some experts recommend asking your planner to commit to fiduciary status in writing.

3. Figure Out the Costs

Restrict your search to fee-only advisers, who charge for advice and asset management and don’t receive commissions by selling you financial products.

Fee-only advisers use a variety of payment models, says Roxanne Martens, a financial adviser with CGN Advisors in Manhattan, Kan. Some charge an hourly rate, which can range from $100 to $400. Many of the same planners will charge a flat fee for a predetermined bundle of services—an average of $2,400 to evaluate your financial life and map out a comprehensive long-term plan, according to a 2019 study. These models tend to work best if you’re looking for help with a specific issue or a plan that you’ll carry out on your own, possibly with periodic check-ins.

Other advisers charge clients a percentage of assets under management each year. Their rates generally range from 0.6 to 1.2 percent of the portfolio size, annually. The percentage is often lower for larger account balances, so this model is generally most cost-effective for investors with more assets and more complicated financial lives. Some planners use only the percentage model and—note—will take you on as a client only if your portfolio meets their minimum.

4. Vet the Contenders

Once you’ve compiled a list of candidates, confirm their credentials through the CFP Board. And make sure no disciplinary actions have been taken against them by going to the Securities and Exchange Commission’s Investment Adviser Public Disclosure site.

Then schedule a time to speak with two or three of the most promising candidates, ideally in person. Many good financial advisers offer a free initial consultation. Make sure they have experience working with clients in similar circumstances. (Ask them to describe how they handled a situation like yours.) This may be the start of a long relationship, one that is likely to touch on very personal issues. So be sure they communicate clearly and listen well, and will be able to keep you motivated to stick to your long-term plans.

Comments

Post a Comment

Popular posts from this blog

Financial Tips for Young Adults

Image
If you’re lucky, your parents taught you self-control when you were a kid. If not, keep in mind that the sooner you learn the essential life skill of delaying gratification, the sooner you’ll keep your personal finances in order as a matter of habit.  One of the most important ways to exercise self-control with your finances is also very simple. If you wait until you’ve saved the money for whatever it is you need, then you can put all everyday purchases on a debit card instead of a credit card. A debit card deducts the money from your checking account immediately (with no additional fees), but a credit card—unless you can afford to pay off the balance in full every month—is actually a high-interest loan. If you get into the dangerous habit of putting all your purchases on credit cards, then not only will you be paying interest on a pair of jeans or a box of cereal, but you could also still be paying for those items in 10 years. Credit cards are certainly useful; some offer gr...
Read more

Financial Planning Advice For Young Adults

Image
You may have only just started to make waves in your chosen career path or be on the cusp of building substantial savings to be looking into buying your first home, and feel like investing in your future is a daunting process. Alongside this, you may feel like approaching a Financial Planner for advice when you aren’t really sure what you even need advice on is stopping you from making decisions for your financial future. Contrary to these fears, approaching an advisor for financial planning advice when you are a young adult does not have to be intimidating. By following a few tips on how to prepare for your consultation, you can begin planning how to navigate your future. Why You Should Start Financial Planning Now Realistically, being in your twenties and thirties means a lot of financial future projections apply to you as much as, if not more than, an age bracket that currently has more financial considerations. The housing market, Brexit future, student loan repayments and ...
Read more

Eight Steps To Choosing A Financial Adviser

Image
People have long memories when it comes to sharp financial practice. Over the past 30 years, a string of mis-selling scandals involving pensions, investments and commission-driven products such as payment protection insurance have left many sceptical about the wisdom of approaching someone for financial advice. The way such advice is given has nonetheless changed dramatically in recent years, largely under the influence of regulators. Where once people may have been invited to “free” sessions, paid for by kickbacks or commissions on investments and products, today’s customers must pay an upfront fee — often running into several thousand pounds — for unbiased advice tailored to suit their needs. These tougher standards were introduced in 2013 under the Retail Distribution Review (RDR), which forced regulated advisers to hold higher levels of qualifications and banned commission-driven sales. Nevertheless, quality varies and charging structures can still be opaque. At the same time...
Read more