September 13, 2010

Choosing a Financial Planner

9/13/10 |
Karen Saley, Extension Specialist, Pinellas County Extension

Now more than ever it may be time to think about speaking with a certified financial planner. It’s always a good idea to get some sound financial advice, but in difficult economic times when resources may be limited it could mean the difference between losing or saving money.

Choosing a financial planner is just as important as choosing a doctor, lawyer, or accountant. You want someone that is reputable and has your best interest in mind. So how do you go about finding someone you can trust?

Start by asking family and friends. You may also want to consult your banker, insurance agent, accountant and other people in the financial industry. Many financial planners work with these professionals and may have well established relationships with them. It’s usually best to have an in-person interview with your potential planner. Body language says a lot about a person plus you will notice immediately if you have a sense of comfort with the person. Remember, you will share a lot of personal information and you want to feel secure in the knowledge it will be kept confidential and used appropriately.

The Financial Planning Association recommends that you ask these basic questions when interviewing a financial planner:
  • Financial planning and other financial designations a planner holds
  • Educational background and work experience
  • Licenses to sell certain financial products, such as life insurance or securities
  • Services the planner provides
  • The planner's basic approach to financial planning
  • Areas of specialization
  • Types of clients the planner serves, and any minimum net worth or income requirements
  • Professional affiliations, including membership in the Financial Planning Association
  • How the planner prepares a plan
  • How the planner might address your particular needs
  • Whether the planner or others will implement recommendations from the plan
  • Business relationships the planner has that might present a conflict of interest
  • How the planner is paid for services and typical charges  
You can also check with the Certified Financial Planner Board at 888-237-6275 to determine if any complaints have been filed against the planner you are considering.

Once you have chosen a planner you will want to gather all your relevant documents to take to the meeting. Some of the information you should take with you are: 
  • Bank Statements
  • Credit Card Balances
  • Mortgage or Loan Payment Books
  • List of Employee Benefits
  • List of Assets & Liabilities
  • Retirement Account Statements
  • Investment Statements
  • Tax Return  
For a complete list visit

Having all of your documents organized will save time during your meeting which could mean saving you money. There are a number of ways financial planners charge for their services and you will want to discuss this with them prior to your first meeting unless the initial meeting is free. Many times you won’t really know what services you will need in the future until the planner has gone over your portfolio.

All of the financial planner's compensation from his or her client work comes exclusively from the clients in the form of fixed, flat, hourly, percentage or performance-based fees.

There is no charge for the planner's advice or preparation of a financial plan. Compensation is received solely from the sale of financial products you agree to purchase in order to implement financial planning recommendations.

Combination Fee/Commission 
A fee is charged for consultation, advice and financial plan preparation on an hourly, project or percentage basis. In addition, the planner may receive commissions from the sale of recommended products used to implement your plan.

Some planners work on a salary and bonus basis for financial services firms.

Keeping your money secure and growing is one of the corner stones to building a secure financial future. It just may be time to look into getting some first-rate financial advice.




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