When seeking a financial planner, the most important consideration is expertise in the areas you need, such as end-of-life finances, estate planning, experience with large estates or business, retirement planning, or analyzing your current situation to prepare financial reports and/or, assessing investments.
Here are some other recommendations when picking a financial planner.
- Choose an advisor who is a Fiduciary.
- A Fiduciary is a professional who is ethically bound to act in your best interest.
- This will reduce concerns about conflict of interest and make their advice more trustworthy.
- Research and interview different advisors and identify their strengths and weaknesses.
- Ask about their licenses, tests, and credentials.
- Financial Advisors tests include:
- Series 7 – qualification to work as a General Securities Representative
- Series 65 – qualification to work as an Investment Advisor/Investment Advisor Representative
- Series 66 – qualification to work as an Investment Advisor Representative and as a Securities Agent
- A boarded Certified Financial Planner is recognized as an expert in the areas of financial planning, taxes, insurance, estate planning, and retirement.
- Choose an advisor with an investment strategy you are comfortable with.
- Do you want your advisor to be aggressive, conservative, or somewhere in between?
- Do you prefer to go mostly with stocks, do you prefer bonds and index funds, or would you prefer a considered blend of many investment types?
- Choosing an advisor from a reputable firm increases the chance of a stable relationship and access to better tools and information. However:
- association with a major firm like J.P. Morgan or Morgan Stanley does not assure that your advisor is qualified and appropriate for you
- you must still choose your advisor because they will work well with you, not because of where they work
- Make sure you understand how your advisor is paid and if it conflicts with your interests.
- Advisors may be “fee only” and charge you a flat rate, so you know exactly what you are paying.
- Others may charge a percentage of your assets they are managing. This may be a motivating factor to increase the value of your estate.
- Conflicts may occur with advisors who are paid commissions by mutual funds or other specific investments. You may be recommended to choose these investments, even if they are not the best ones for you.
- Be wary of any advisor who “guarantees” specific returns on your investment
- Investing is always a gamble.
- Unrealistic promises are just that – unrealistic.
- If you feel pressured to make decisions more quickly than you feel comfortable with it’s a signal to take a break or end the session
The Financial Planning Association website has ways to search your area for the type of financial planner you need.
After you decide, schedule a meeting with the advisors to discuss any areas related to their specialty.