Consider the following five factors to ensure your financial planner is well-versed in personal finance and offers unbiased advice:
1. Planning Credentials: Having a highly regarded financial planning credential, such as Certified Financial Planner (CFP) or Personal Financial Specialist (PFS), confirms that the professional you intend to work with has the necessary education and experience to serve as a financial planner. Only those with the CFP and PFS credentials have met the certification requirements of education and experience in personal financial planning. They must also pass the certification exams and agree to follow the practice standards and continuing education requirements.
2. Subject Matter Expertise: Financial planners are professionals who plan, not subject matter experts. A financial planner, for example, will be skilled in tax analysis and planning, but unlike a Certified Public Accountant (CPA) or an IRS Enrolled Agent (EA), he may not be a subject matter expert when it comes to tax rules. Similarly, he may be skilled at developing an investment strategy, but unlike a Chartered Financial Analyst (CFA), he may not be an authority on the subject. Work with a financial planner who is also a subject matter expert in the areas of personal finance that are critical to meeting your financial objectives.
3. Client Specialization: Not every financial planner works with every type of client. Most only serve specific types of clients with specific profiles. A personal planner, for example, may develop his expertise and tailor his services to serve only individuals and families in specific professions or stages of life with specific financial goals and net worth. In order to determine whether the planner is the right fit for your situation and financial goals, inquire whether he only serves certain types of clients with specific profiles.
4. Fee structure: The fee structure largely determines whether he serves his client's or his own interests best. A Fee-Only professional only charges fees for their advice, whereas a Fee-Based professional also earns commissions, referral fees, and other financial incentives on the products and solutions they recommend for you. As a result, advice from a fee-only financial planner is more likely to be unbiased and in your best interests than advice from a fee-based financial planner. Work with a professional whose fee structure is free of conflict and geared toward your benefit.
5. Availability: He or she should be available, attentive, and accessible to you on a regular basis. Inquire with the planner about the number of clients he currently serves and the maximum number of clients he plans to serve on a regular basis in the future. This client-to-planner ratio is an important factor in determining your planner's future availability to you. In addition, inquire about which planning tasks are typically performed by the planner and which are delegated to a paraplanner or other junior staff members. Finally, during normal business hours, ensure that the planner is easily accessible by phone and email.
Once you've narrowed your search to a few well-qualified and unbiased financial planners in your area, start with the ones who offer a free initial consultation. During the initial consultation, evaluate the planner's availability as well as any other professional qualities you seek in your financial planner.
It is critical to have a well-qualified and objective financial planner by your side as you work toward your financial goals. To find the best financial planner for your needs, consider the planner's professional credentials, client specialization, subject matter expertise, fee structure, and availability."""
