Things To Consider When Hiring A Financial Planner

by Hank Coleman

More people than ever are choosing to trust their investments with a financial planner or an investment advisor. Choosing a financial planner to represent you and your investing goals is not a decision that should be taken lightly. It is not a decision to be made by randomly calling the first advisor or planner listed in the phone book. Here are a few things to keep in mind when building this critical relationship.

Ask Your Friends. Like finding a good real estate agent, doctor, lawyer, or other professional, you should ask your friends and coworkers who they recommend. It is an important decision as to who you are going to trust with a good portion of your financial future, and a recommendation from a friend can point you in the right direction. Keep in open ear when people talk about who they like and more importantly who they have had problems working with. I personally make it a habit to stay away from businesses and professionals that my friends and coworkers have had issues with.

Ask For References. Do not feel weird for asking for references. Most professionals are actually used to it and support the practice. Many will have a readily available list of people that would speak highly of their work. You should balk at any financial planner who dodges providing you with references when asked. I think that the hardest part of the equation is actually asking for them. I always feel like I am questioning authority. But, do not worry about someone’s feelings in this regard. It is your money we are talking about.

Check Certifications. If you are looking for a financial advisor, give extra credit to those people who have those little letters at the end of their names. While having a career designation is not a requirement, it should put that professional on a little higher plain than other without one such as the Certified Financial Plannerâ„¢ certification. To become a CFP ® professional, an advisor must put in hundreds of hours of studying in order to pass a grueling ten hour exam. Furthermore, members are required to undergo background checks, agree to a code of ethics, and continue their education to keep the certification. While hiring a certified financial planner is no guarantee of their performance, it is a good indication that the financial professional is legitimate.

Ask The Board. You can check to see if your financial planner has the CFP designation at the Certified Financial Planner Board of Standards’ website,, which grants the certification. You can also use the BrokerCheck feature on the Financial Industry Regulatory Authority’s (FINRA) website to see if there are any complaints on file for a particular broker who holds a securities license. You can also check out registered advisors on the Security and Exchange Commission website. Their SEC Investment Advisor search feature can check on the advisor and the firm they work for.

Ask What They Do With Their Money. Why would you take investment advice from someone who does not have their own financial affairs in order? It is like listening to a doctor who tells you to stop smoking and get exercise more when they reek of cigarette smoke smell. Does your financial planner invest in the very same mutual funds that he or she recommends for you and your money? It should set off red flags if your own planner balks or has issues with their own finances.

While you should find a financial planner or investment advisor that you like and trust, that is no substitute for overseeing your own finances yourself. You should be involved and informed of everything that your representative is doing on your behalf. No one cares more about your financial future than you do. You should not turn over complete control blindly over to someone. You need to stay involved and monitor the situation.

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