3 steps to find and hire a financial planner

  • A financial planner can help you plan your retirement, create an investment portfolio, plan your money to meet your financial goals, and much more.
  • When looking to hire a financial planner, be sure to consider their specialties and certifications.
  • You should also consider how financial planners charge, which can range from a flat rate, hourly rate, withholding tax, activity percentage, or commission.
  • Find a financial advisor near you with SmartAdvisor.

Hiring a financial planner can help you achieve your short- or long-term goals, such as having a comfortable retirement, funding your child’s college tuition, or buying a home.

These professionals aren’t for everyone, however, and finding the right one is critical to your success. Here’s what you need to know about financial planners and how to focus on the best one for your goals and budget.

Understanding your financial needs

To choose the right financial planner, you must first understand what you are trying to achieve. Are you looking to maximize your retirement funds? Do you want to earn more from your investments? Is planning your property and inheritance first?

Financial planners typically have specialties, so you’ll want to pick one that closely aligns with your goals. Common financial planning specialties include:

  • Planning
  • Invest
  • Retirement planning
  • Business planning
  • Debt management
  • Balance
  • Tax planning
  • Insurance

There are also planners who specialize in specific life stages, demographics, or even people with certain occupations.

“When looking for a financial planner, it’s important to understand exactly what you’re looking for,” says Jay Zigmont, a CFP® planner and founder of Childfree Wealth, which focuses on financial planning for adults who choose not to have children. “You’ll find planners who specialize in almost every group, job and stage in life, so find the one that’s right for you.”

Choosing a financial planner who is a trustee is also important. This means they must avoid conflicts of interest and always put your interests first.

“A planner operating under the fiduciary standard is required by law to keep your best financial interests ahead of theirs,” said Jason Steeno, president of financial advisory firm CoreCap Investments in Southfield, Michigan.

1. Look for financial planning options in your area

There are many ways to find a financial planner near you. Asking friends, family, and colleagues is often a good place to start, as they can recommend local planners they have had personal experience with.

You can also use one of these online resources, which allow you to filter by geographic area:

  • Financial Planning Association: The FPA tool allows you to search for CFP® professionals in your area and you can filter by specialty, type of compensation and certification.
  • National Association of Personal Financial Advisors: With NAPFA’s search tool, you enter your postcode and you can filter planners based on their distance from you. There is also a map that you can use to view all your options in one place.
  • Let’s make a plan: This is the research tool of the Certified Financial Planner Board of Standards. You can search by location, services offered, or both. All planners listed are CFP® professionals.
  • XY planning network: XY’s tool allows you to search for paid financial advisors (more information below) in your area. You can search by location and filter the results using various keywords and specialties.

After selecting a few names, check them out at BrokerCheck.com and with the Securities and Exchange Commission. There, says Steeno, “You can see how long they have been in business or if they have had disciplinary history.”

2. Review the credentials of a financial planner

There is no single “financial planner” license or certification. As Steeno says, “Almost anyone can call themselves a financial planner.”

To make sure you choose an experienced and knowledgeable professional, look for professional designations such as CFP®, CFA, or CIMA. These are just a few of the credentials a financial planner may seek out, each pointing to a different specialty or skill set.

Here are some of the credentials you might see:

  • PCP®: A CFP® is a CERTIFIED FINANCIAL PLANNERTM. These professionals must have a bachelor’s degree, a minimum of three years in full-time financial planning, and complete a board certification program. CFPs® must also require 30 hours of continuing education every two years.
  • CFA: CFA professionals must take a three-part exam focused on investment tools, resources, wealth planning and portfolio management to be certified.
  • TOP: Professionals with a CIMA designation are certified investment management analysts. CIMAs must have three years of financial services experience and enroll in a CIMA training course at the Yale School of Management, the Wharton School at the University of Pennsylvania, the University of Chicago Booth School of Business, or the Investment Management Research Program in Australia.
  • MRFC: An MRFC is a Master Registered Financial Advisor. These professionals need at least four years of full-time financial planning experience, have a bachelor’s degree in accounting, business, or finance, and complete 40 hours of continuing education each year.
  • ChFC: ChFCs are licensed financial advisors. They must have at least three years of full-time work experience, complete 27 credit hours of courses, and receive 30 continuing education credits every two years.
  • CRC: This is a certified retirement advisor. They must have two years of professional experience in retirement planning, pass a specialized certification exam, and attend 15 hours of continuing education courses per year.

You can usually find a planner’s credentials listed after their name, either in the online search resources in step 1 or in their professional profile or LinkedIn account.

3. Review the rate structures

There are many ways a financial planner can charge you, so make sure you understand how they charge before working with them. Some services are charged based on the resources or investments managed by the planner, while others charge fixed fees or receive commissions. How they charge can affect how much you’ll end up spending on working with a financial planner, so it’s always important to research this part beforehand.

Here are some of the various pricing structures used by financial planners:

  • For a fee only: Paid planners are paid for the services they provide. This could mean an hourly rate, a flat rate, or a withholding of some kind. Paid planners do not receive commissions or kickbacks from the products and policies they recommend.
  • AUM: Assets Under Management is another paid approach. With this pricing structure, you will pay a certain percentage of the total resources managed by your planner.
  • Commission: Commissioned financial planners are rewarded based on the products they sell to you. This can cause a conflict of interest, as it motivates them to recommend certain products, even if they no longer suit your needs.
  • For a fee: A commission-based model is a combination of commission-only and commission structures. You can pay a commission for the planner’s service, and they may also receive a commission for certain products they recommend to you.

In general, most professionals recommend looking for someone to pay, as this ensures that they have your best interests at heart. This includes AUM-based models, which motivate the planner to grow your resources (and avoid losses).

“It ensures that the consultant’s interests align with yours,” says Steeno. “They want your assets to increase in value just like you.”

Online financial planners vs traditional planners

You don’t need to meet a financial planner in person to get professional help. Many financial planners offer online services that allow you to get the guidance you need without leaving your home. These usually include phone and video calls, where you “meet” your planner virtually on Zoom, Skype or another similar service.

These can be a good option if you want a faster and more convenient service or to work with a planner outside your region.

There are also robo-advisors, which can be used to build and manage your investment portfolio. They are typically cheaper than using a real consultant and have low starting balance requirements, but they are also less comprehensive and personalized. Robo advisors typically don’t help with budgeting, estate planning, tax planning, or other non-investment services.

As Rob Burnette, MRFC and CEO of Outlook Financial Center in Troy, Ohio explains, “robo advisors are only useful for the investment portion of a financial plan.”

In some cases, robo advisors may include interactions with a live advisor (sometimes for a fee). But it’s usually not a dedicated professional account, and you may be limited to how many times you can interact with them. This means less consistency and personal guidance than you would get with a financial planner you hired directly.

“Robo-advisors generally offer a one-size-fits-all solution,” says Kris Maksimovich, CRC and president of Global Wealth Advisors based in Lewisville, Texas. “They lack customization and input and offer no assistance during times of market volatility.”

The bottom line

A financial planner can help you achieve your long-term goals, but choose yours carefully. There are many types of financial planners and their specialties, costs, credentials and services should all play a part in your decision.

Don’t be afraid to interview some candidates. Host introductory meetings with two or three professionals, and use the time to ask questions, understand their processes and rates, and make sure they are suitable before moving on.

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