What to Look For in A
Financial Planner – How to Choose an Advisor – Certification Education
and Experience op Planners
May 24th 2006
There are various organizations that Financial Planners may be
associated with. The most prominent association is the Certified
Financial Planners (CFP) Board of Standards, which is the premier
organization. They provide rigorous testing of applicants including a
You will want to know about the planner’s experience and
qualifications. The CFP recommends you ask the planner to briefly
describe his or her work experience, and how it relates to their current
practice. Although the term “financial planner” is used by many
financial professionals, not all will be certified by the CFP. The
Board says you should choose a well rounded planner with “proven
experience” in insurance, tax planning, investments, estate planning or
Your financial planner will likely ask you a series of questions which
could lead to a comprehensive plan. These questions will include your
financial objectives, current income, investments, risk tolerance,
expenses, tax returns, insurance coverage, retirement programs, and
The questionnaire will help your planner develop a set of
recommendations. But it does not stop there. According to Princeton
Review, financial planners must constantly be updating their plan and
watching the all-important market for trends that will affect the plan
they have offered.
The financial planner needs to consider and have knowledge of investment
planning, retirement planning, tax planning, estate planning, and risk
management. You may want to ask the planner what their approach to
financial planning is. The services they provide may depend on a number
of factors including credentials, licenses and areas of expertise.
Generally, financial planners are advisors and are not involved in
selling insurance and securities products without the proper license.
Some planners may specialize though.
Financial planners can be paid in several ways. Some planners work for
a company and are paid a salary. You pay the company either fees or
commissions, and they pay the planner. Others may charge an hourly rate
or a flat fee based on a percentage of your assets.
Financial planners may be paid a commission by a third party who sold
you products. Some planners may be paid a combination of fees and
commissions where the commissions are paid as a percentage of the
products either by a third party or by you.
People skills are an integral part of the planner’s job. Make sure the
planner is not too aggressive or too cautious. Also, the Board advises
you to get a list of professionals outside his own practice (such as
attorneys, insurance agents or tax specialists) who help develop or
carry out financial planning recommendations. Get the list of names to
check on their backgrounds.
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