How to Choose a Financial Planner?

Answer 1

People have all sorts of reasons for choosing to turn their financial lives over to a professional. Some don’t feel they have the time to manage it. Some don’t feel they have the expertise. No matter which camp you fall into you’ll need to use the same criteria in order to make sure that the individual you hire is working towards your best interests and is not simply trying to line his own pockets.

If you’re looking to hire a financial planner, make sure you follow these steps and ask these questions so that your experience is a positive one.

Check his/her credentials

You obviously want to make sure that the planner is qualified to be giving you financial advice. A good planner shouldn’t have any trouble providing their resume. Make sure you look for a planner that carries the CFP (Certified Financial Planner) designation. This title ensures that the holder has passed a considerable educational examination and has committed to continuing education and ethics requirements. You’ll also want to make sure that the planner passes a criminal background check. Any record of ethics, fraud or regulatory charges is a certain red flag and an invitation to look elsewhere.

Get references from clients

Ask to speak with the planner’s current clients to see how they would rate their experiences. If the planner is on the up and up, he’ll be happy to provide references to you. If not, consider it safe to assume that he’s got something to hide.

See how they’re paid

There are two types of financial planners in the world – commission-based planners who earn their salary based on what they get you to buy and sell and fee-based planners who earn their salary based on the level of assets they are managing. All things being equal, you’ll want to choose the fee-based planner. Commission-based planners can have a tendency to buy and sell certain products that generate the highest commissions regardless of how appropriate they are for you. A fee-based planner grows his salary if he grows your portfolio which benefits you both.

See what they say

Perhaps the best way to determine if a planner is for you is based on what he tells you or what he says he can deliver. If he promises great returns or guarantees that he can beat the market, you’ll want to walk away. In the financial world, if it sounds too good to be true, it probably is.

Answer 2

If you would like to seek advice on how to protect your investments and make more intelligent decisions regarding your finances, seeking the help of a financial planner may be the best course for you. There are various types of financial planners who can help with virtually everything you need with regards to finances. Here are some tips on finding the right professional to suit your needs.

• Step 1: Before you start looking for a financial planner, make sure that you have clear goals on what you want with life, and what your goals are in terms of finances. Maybe you want to own a vacation home before you retire, or you want to put up a business after working for a few years in the corporate world? Whatever your dream is, it's best to have a clear idea of what it is before seeking the help of a financial planner.
• Step 2: Determine if you will need the services of a national firm or if local financial planners would better suit your needs. Generally speaking, you will have the advantage of having more established financial analysts and advisors with a national firm, but this would also translate to higher overhead costs - and fees charged to you.
• Step 3: Whenever you have the time, talk to your colleagues and friends/family members; ask them for any recommendations they might have on the best financial planners. Take the time to get in touch with at least three financial planners, so you can see for yourself how you will work with them in the future (if ever you do get their services).
• Step 4: Make sure that you check the credentials of the financial planners you are considering. It is perfectly alright for you to ask a list of their credentials/certifications, and which organizations provided the mentioned certifications.
• Step 5: Before committing to the services of the financial planner, make sure that he is upfront with the fees he will charge. Some financial planners charge their fees on a commission basis, while others have set amounts to be charged for specific financial plans. If you find the fees too high, do your best to negotiate with the planner.
• Step 6: Make sure to ask for references from your planner's former clients, who may have the same concerns as you do.
• Step 7: Determine what means of communication you and your planner are going to use, and the frequency of that communication.

Looking for a financial planner that would best suit your needs would take a considerable amount of time and effort, but since this is your financial future that we are talking about - it is an effort worth taking. Keep in mind that the financial planner would have access to confidential information, so you also have to use your instincts in choosing one - and go for the one whom you trust.