Dear Savvy Senior,
Can you recommend some tips on finding and choosing a good financial planner? My wife and I are both in our late fifties and would like to get some professional advisement to help us better prepare for our retirement years.
With all the different financial planners, advisers and services available today, finding and choosing a trusted professional that can help you meet your financial goals can be confusing. Here are a few suggestions to consider.
Where to Look
A good place to start your search is by asking friends or relatives for recommendations. If you don’t know anyone who can give you a referral, and you’re looking for broad-based financial advice, hire a Certified Financial Planner, or CFP, who are considered the “gold standard” in the industry. CFPs must act as fiduciaries, putting their client’ best interest above their own.
To get the CFP credential, they must have a college degree and be educated in a wide range of personal finance subjects, pass a rigorous certification exam, have three years professional experience, meet continuing-education requirements and abide by a code of ethics.
CFPs are taught to look at the big picture view of your finances, talking you through your goals, as well as advising you on the details of your financial life.
You’re also probably better off hiring a CFP that’s a fee-only planner, verses one who earns a commission by selling you financial products. Fee-only planners charge only for their services – for example you might pay $150 to $350 an hour for a financial tune-up, a flat fee per project or an asset-based fee.
To find a fee-only planner in your area, use the National Association of Personal Financial Advisors (NAPFA.org), which carefully vets all members and offers an online directory. Or see the Garrett Planning Network (GarrettPlanningNetwork.com), a network of fee-only advisers. Or the Alliance of Comprehensive Planners (ACplanners.org), a community of feeonly advisors that charge annual retainers.
If your needs are more specific, some other financial professionals to consider are a Registered Investment Adviser (RIA) who is registered with the Securities and Exchange Commission or a state securities regulator to manage investment portfolios; a Chartered Financial Consultant (ChFC), who specialize in insurance and estate planning; and a Certified Public Accountant (CPA), who can help with tax planning.
Be leery of many other financial advising titles, designations and certifications that are out there like the Certified Financial Consultant (CFC) or the Wealth Management Specialist (WMS). Many of these require no more than a few courses at a seminar or online, which means they’re not worth much. To research the different certifications or designations visit FINRA.org/investors – click on “Tools & Calculators,” then on “Professional Designations.”
How to Choose
After you find a few candidates in your area, call them up and schedule an appointment to meet and interview them. Find out about their experience, expertise and the types of services they provide; if they’re a fiduciary; how they charge and how much; what is their investment philosophy; and how will they handle your ongoing questions or financial needs. Look for someone whose clients are in situations similar to yours and who’s available as often as you need them.
It’s also wise to do a background check on your potential advisor. At LetsMakeaPlan.org, you can verify a planner’s certification as CFP (click on “Verify CFP Professional Status”). You’ll also see any information on the planner’s disciplinary history with CFP Board and on bankruptcy filings in the past 10 years.
To vet a registered investment adviser, go to Investor.gov where you can search an individual’s name and click on “Detailed Report” to see information on qualifications, employment history, disciplinary actions, criminal convictions and more.
To check out a broker, visit BrokerCheck.finra.org where you can search an individual or firm’s name to get details like years of experience, licensing, exams passed and regulatory actions.
Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior.org. Jim Miller is a contributor to the NBC Today show and author of “The Savvy Senior” book.