Selecting Financial Planners

Selecting financial planners isn't just about finding someone who seems knowledgeable; it's about finding someone whose knowledge is suited to your goals and level of risk tolerance. Do you want someone to help you save for a house, or plan a retirement? When will you need the money you've invested? By narrowing down your goals and timeframe, you'll have a better basis to interview financial planners and find one whose knowledge and experience is suited to your needs.

When Selecting a Financial Planner, Ask for Referrals
Word of mouth is an invaluable tool when selecting a financial planner. Ask friends and family if they've consulted with financial planners, and whether or not they would recommend their financial planners. When you find a financial planner you might want to use, ask for a few referrals from current clients with whom you can speak and find out more about their level of satisfaction with the financial planner.

Knowledge is only one part of the equation of selecting a financial planner; you'll want to find a financial planner who actually listens to your goals, uses industry knowledge to help set you up with the right plan for your circumstances and is responsive to your needs. By asking for referrals, you'll get an idea of whether your selecting a financial planner you'll love, or whether you're better off continuing your search.

Look at Fee Structures
Some financial planners work on commission or get a bonus for pushing specific products. Other financial planners work on a fee-based structure, charging a flat fee for a specific type of financial plan or an hourly fee for ongoing services. Consider fee structures when selecting a financial planner. If your financial planner works on commission, determine whether you're comfortable with the information you receive or whether you feel the financial planner has a hidden agenda. You need to advocate for your financial future, so don't be afraid to turn down a commission-based financial planner in favor of someone who charges a flat fee and has no particular interest in recommending specific products. You are looking for a planner who can help you, not give you a sales pitch.

Check for Certifications and Experience
You want an experienced financial planner, one who isn't just a sales rep and doesn't have any hidden agendas to promote. One of the best ways to ensure you're selecting a good financial planner is to look for Certified Financial Planners, or CFPs. Certified Financial Planners have specific backgrounds, with at least three years of experience and ongoing education in the financial planning field. Other financial planners with reasonable certifications and experience include Certified Public Accountants and Personal Financial Specialists. When selecting a financial planner, ask for and verify information about education and experience.