Finding a Financial Advisor

While you may be confident in your ability to make financial decisions, it’s never a bad idea to consider seeking additional advice. Some people opt for the assistance of a financial planner or advisor in order to help them make difficult financial decisions and plan for a financially secure future. However, there are also those who would never consider using the services of a personal financial advisor, out of fear of entrusting a stranger with their wealth, both present and future. It’s true that the precise role of so-called financial advisors and planners is difficult to pin down – indeed, there are currently no regulations governing the credentials required to be a financial planner. Pretty much anyone can call himself or herself a financial planner, which is why you need to consider the following before you hire one.

Finding the Right Planner

In much the same way that you would shop around when looking to purchase a big-ticket item, you should also shop around when finding a financial planner. You can start by asking around your social circle. Recommendations from people that you trust, such as your family and friends, are worth their weight in gold. However, before you follow up, consider whether you have similar financial priorities and needs as the person who gave you the recommendation. For instance, if you’d like to use the services of a financial planner to buy your first home, you might not want to follow up on a referral for a planner who usually deals with small business owners. If you don’t have enough candidates or aren’t able to find a planner who typically deals with similar needs, contact the Financial Planning Association to connect with planners in your area.

Ask for Credentials

You’ll want to hire a professional financial planner who has actual credentials, as opposed to a stockbroker, banker, or insurance agent. The credentials you should look for include the following: Personal Financial Specialist (PFS) or Certified Financial Planner (CFP). These titles are only awarded to individuals who have taken certification courses and passed exams to verify their knowledge. For instance, in order to earn the title of CFP, the individual must pass a test that checks his or her comprehensive knowledge of aspects of planning including investments, taxes, retirement, insurance, employee benefits, among other topics. Financial planners are trained to assess a number of areas of personal finance in order to see the big picture. In this way they are able to assist a client in setting goals and identifying priorities and subsequently implement a plan. The client must then choose whether he or she wants to follow the planner’s advice.