Two frequent questions that people have about firing a financial advisor are "how can I find a quality advisor?" and "how much do they charge?" The following are some tips for selecting financial services professionals:
Define Your Needs--What kind of services do you want? Are you looking for comprehensive financial planning services, which would include someone to give you advice, help you implement that advice and be there when you need him or her? Or, on the other hand, are you simply looking for answers to specific questions or someone to review your financial situation?
Check Credentials--What credentials, licenses and education does an advisor have? Look for specialized training in financial planning such as the Certified Financial Planner (CFP) license. To determine if a financial planner is a CFP licensee, ask to see the planner's current Certified Financial Planner Board of Standards certificate or check the CFP Board's Web site, www.cfp-board.org , for the names of CFP licensees.
Look For Registered Investment Advisors--Because investment advice is often involved in financial planning, a financial planner also should be a Registered Investment Advisor or affiliated with a Registered Investment Advisory firm. This registration is issued by the U. S. Securities and Exchange Commission or a state securities regulatory agency (depending upon the amount of assets under a firm's management). CFPs must also agree to adhere to the Certified Financial Planner Board of Standards' Code of Ethics. They must disclose any investigations or legal proceedings related to their professional or business conduct. The Board reviews all disclosure statements carefully and investigates the backgrounds of CFPs whose disclosure statements indicate areas of concern.
Evaluate Experience--Practical experience counts for a lot in the financial services industry. Look for someone who is both well trained and has worked with clients for a period of time. CFP licensees, for example, must have at least three years of previous financial services experience. Since financial planning is a relatively new profession, you might also want to find out about work experience prior to the financial services industry. Does the financial advisor come from a sales or services background? Also find out what financial planning organizations an advisor belongs to. Such membership indicates a planner's commitment to professional improvement.
Consider Specialization--Find out what areas and/or types of clients an advisor specializes in. Because financial planning is such a broad field, many planners tend to specialize. Determine if the planner's specialties match your situation.
Consider Compensation--Planners are paid by fees, commissions or a combination of fees and commissions. Ask how the planner is compensated before you enter into a working agreement.
To obtain information about local certified financial planners, call 1-800-282-PLAN. You'll be asked your ZIP code and will be given the names of local CFPs. Once you receive these names, call several planners and find one that you like and trust. Several planners may be equally competent, but you should choose the one with whom you feel most comfortable.