Tips for Choosing a Financial Planner

• Author: Jessica Williams
• Posted: 2024-04-12

Choosing a financial planner is one of the most momentous decisions that you can make regarding your money. Your financial plan represents both your present and future and the person who is responsible for guiding it has a tremendous responsibility. Therefore, it is vital that you trust this person implicitly. There are methods that one can use for screening planners when they are in the market for one. Doing your due diligence on a financial planner is a process that takes time and effort but it well worth it in the end. Here are four tips for finding a financial planner that you trust.

Focus on the Planner's Credentials

First, if you are searching for a planner on your own, you can find names in a number of different directories. In addition, you can call some of the major financial companies in order for them to refer you to one of your local planners.

The CFP designation is something that a planner must earn. It means that the planner must have completed a rigorous course of study and passed a detailed exam. When a planner earns those letters after their name, it means something. It is important to make sure that someone who passes themselves off as a CFP actually holds that title. You can actually check their credentials online to ensure that they are who they say they are.

Beyond verifying that someone is a CFP, you can also check to see if they have a disciplinary history or record. The CFP's website has this information, and it is searchable by planner. It is a must to do business with people who have a clean track record of honesty and sound business practices.

Get Referrals

Even after you have researched a planner online, you may still not know as much as you would like about them. One way to learn more about a financial planner is through word-of-mouth. When they have worked with a friend or family member, you will be able to hear stories from someone who has personal experience with the planner. This way, you will be able to know if they deliver on what they promise. You can also find out what the planner is like to deal with and the type of service that they actually offer. Many financial planners seek referrals from their clients, so you may be contacted by a friend or relative's planner at a certain point in time.

Interview the Planner

One of the best things that you can do of a planner is to ask them many questions. You can find out more about their specific plan for you and how they would plan to implement it. In addition, when you have a conversation with them, you can learn more about whether you have chemistry with this particular planner. While the relationship is not the only thing, you want to know that you are dealing with a responsive planner who takes the time to answer your questions and treats you with courtesy. Unfortunately, some planners who have great credentials and talk a strong game do not measure up in some of the interpersonal aspects of a relationship, causing potential clients to keep looking.

Learn More About the Products They Offer

There are many different types of professionals who carry the designation of CFP. They may even have completely different plans for you or ways of helping you achieve your financial goals. The most important thing that you can look into is how they will get you where you want.

Some financial planners will offer you products that are affiliated with the company that they represent. While this is not automatically a bad thing, it is something of which you need to be aware. You want a wide range of financial products at your disposal, and it helps to know why a planner recommends a certain course of action.

Another way of learning more about this is by asking the planner how they are paid for their services. When a planner is paid on commission, you should make sure that there are safeguards in place to ensure that they are acting in your interest as opposed to trying to sell you a product so they can earn a commission. While we are not suggesting that one means of planner compensation is better than another, you should at least be aware of how the planner makes their money.