Broker Check
Choosing a Financial Planner

Choosing a Financial Planner

August 07, 2016

Choosing a financial planner could be the one of the most important decisions you make.  With so many candidates from which to choose, it might be helpful to learn some of the industry jargon, understand the options and define your needs - much as you would when choosing any other professional service.  Here are ten things you might consider as you begin your research:

They're not all pros

Anyone can call himself a financial planner, but that doesn't mean the person has been trained in financial planning. It also doesn’t mean he or she follows a financial planning process. Look for experience and credentials. Check out and understand the person's designations. At the very least, you probably want a CERTIFIED FINANCIAL PLANNER TM professional, someone who has passed rigorous standardized exams regarding financial planning. To learn more, go to

An investment adviser may not be a financial planner

Investment Advisors may be able to recommend some or all of the range of investment products out there: stocks, bonds, mutual funds, exchange-traded funds, etc.  They may not, however, be able to assist you in other aspects of financial planning: insurance, taxes, college, business, retirement, charitable giving and estate planning.  Make sure the planner isn’t just performing “planning” so they can “sell you something.”

Meet the prospective planner in person

Meet the person face to face.  You need to feel confident that your adviser is trustworthy and that your personalities match.  Make sure you come to the meeting knowing what qualities you are looking for in a planner.  When financial times are challenging (and they will be), this will be the person to whom you turn.  If you don't feel comfortable after meeting with the planner, keep looking.  Yes, first impressions are important!

Look for a clean track record

You want an adviser with a clean history.  If your prospective planner has received complaints, you might want to know about them.  Obtain a copy of the person's Form ADV Part I from the SEC website.  This document contains information about whether the adviser has had problems with regulators or clients.  Check the background of the financial professional on FINRA’s Broker Check.

An adviser should act in your best interest

Make sure your financial planner has pledged to act in clients' best interests at all times. This is called "fiduciary standard." For example, brokers are held only to a "suitability standard," meaning they are expected to deal fairly with their customers and to know their financial situation well enough to recommend suitable investments. Insurance agents have no formal requirements. You are looking for fiduciaries who have pledged to be part of the financial planning honor system, who put your interests ahead of their own.

Know what services are offered

Some advisers offer comprehensive planning that helps you address every aspect of your financial life.  Others focus on a single objective, such as retirement planning.  Still others offer investment management services or provide insurance products.  As you perform your due diligence, determine the services you need and make sure that the planner offers these services. Ask the planner what services they will provide once planning is complete. How are they going to help you stay on track?  

Understand how the planner gets paid

Planners can get paid by flat fee or an hourly rate for the planning work that is performed.  Others receive a fee based on the value of assets they manage for you – and include planning in that fee.  Still others receive a commission for products they provide.  The planner should be able to provide a list of services they provide and the fee for each.

Ask about their team

Planners often have staff who help them on a daily basis.  Understand who you will be working with and who will be helping the planner develop your financial plan.  Ask if you will be meeting only with the planner – during and after the planning process.  Ask who will be providing you with service when you call.  Ask the planner what plans they have in place if they get sick and can’t come to work. If the adviser is older, you might want to ask how long he or she is going to work, and what their plans are for you when they retire, 

Know how often the adviser will be in contact

Communication is key when determining your future with a financial professional.  How that communication takes place can make or break your experience.  How often will your prospective planner communicate with you and how?  Will the communication be in the form of telephone calls, in-person meetings, web meetings or emails?  You may find that regular reviews and ongoing communication are necessary to keep you on track with your investments and other financial goals.  You want to make sure the adviser you hire offers the kind of support you need.

Be wary of hiring a friend

We often feel as though we can trust our friends, and developing trust is important in a relationship with a financial planner.  Ideally, you want to hire a professional with whom you have no emotional ties.  This will permit you to more objectively evaluate their performance on your behalf – which will make it easier to change planners if need be.