| A consultation with a fee-only financial planner (one | | | | risk that you will be directed to an inappropriate |
| who charges only for their time with you, but does | | | | product or investment simply because a planner gets |
| not try to sell you a product) is one the best | | | | a good commission from that product. An advisor |
| investments a younger individual can make. Periodic | | | | candidate should provide complete disclosure about |
| consultations with a qualified financial planner over | | | | compensation. |
| time are important as life circumstances change. A | | | | Questions to Ask Yourself When Evaluating a |
| good financial planner can help an individual to set | | | | Personal Financial Planner: |
| goals and establish benchmarks for meeting those | | | | - Do I like the planner candidate? |
| goals. In general, an individual will want to consult with | | | | - Does the planner listen to me and really understand |
| a good financial planner whenever there are major life | | | | what I am concerned about? |
| changes like births, deaths, or a significant change in | | | | - Does the planner give me straightforward answers |
| financial or medical circumstances (good or bad). | | | | to my questions in a way that I can understand? |
| The goal of the personal financial planning process is | | | | - Does the planner candidate load the conversation |
| make sure you have the money that you expect to | | | | with jargon I can't understand? |
| have when you need it. But how do you find a good | | | | - Does the planner seem to understand the issues |
| planner who will provide you with the advice you | | | | that are of concern to me? |
| need and provide it in a clear and objective way? | | | | - How does the planner define success for a client? |
| Here are some things to consider when looking for a | | | | Is it based on portfolio rate of return? Or helping me |
| financial planner: | | | | to save money? Or planning for my kid's college |
| The three most important factors to consider when | | | | education? |
| choosing a personal financial planner deal with | | | | Here are some direct questions that you can ask |
| experience relating to your personal financial situation, | | | | when interviewing a planner candidate: |
| the formal certifications and credentials of the advisor | | | | - What services do you provide? |
| candidate, and how the planner will be compensated. | | | | - Here are my financial concerns. Do you have |
| You will want a planner who has experience working | | | | experience in these areas? |
| with clients who have financial circumstances similar | | | | - What certifications do you have? |
| to your own. For a good fit, you want an advisor | | | | - Are you licensed to sell certain financial products, |
| who has continuous experience with clients in your | | | | such as life insurance or securities? |
| demographic group. You want a planner who works | | | | - How much risk will you be taking with my |
| primarily with individuals who have needs and goals | | | | investments and what is the return you expect to |
| similar to your own. | | | | earn from taking those risks? |
| Initially, you may want to look for a planner who has | | | | - Will my securities be transparent and marketable at |
| the Certified Financial Planner designation (CFP) or is | | | | all times? |
| working to get it. This designation indicates that the | | | | - How will you be paid for your services? |
| individual has met the appropriate educational and | | | | - What business relationships do you have that might |
| experience requirements, and has agreed to adhere | | | | present a conflict of interest? Do you receive |
| to the organization's code and ethics. | | | | commissions for anything you recommend? |
| Ask financially successful friends, colleagues, | | | | - Exactly how much will the financial products I buy |
| attorneys, accountants, insurance agents, or bank | | | | from you cost in total? Give me those costs as a |
| trust officers for recommendations and referrals. The | | | | percentage of total amount invested. |
| Financial Planning Association (FPA) maintains a | | | | - What sort of investments will you make on my |
| database of CFP professionals listed by ZIP code and | | | | behalf? |
| area of speciality. | | | | - Do you have peer-reviewed, academic research to |
| The compensation of a personal financial advisor is an | | | | support the investment strategy that you propose |
| important consideration. Remember that financial | | | | for me? |
| planners come in many different varieties and may | | | | - Do you belong to any professional organizations? |
| receive compensation in many different forms. Find | | | | - Will my brokerage statement come from a reliable |
| out how the advisor is compensated. | | | | third-party provider like Charles Schwab, Vanguard, or |
| What you are looking for is an advisor who is paid by | | | | TD Ameritrade? |
| you, not by commissions or fees from companies | | | | - Once the plan is complete, how much time will we |
| whose product they sell. To avoid conflict of interest | | | | spend together so I can understand it? |
| issues with a financial planner, be sure they are | | | | In any case, do your homework and ask tough |
| fee-only, meaning they are compensated only by the | | | | questions. Your financial future is at stake! |
| hour or some other time slice. This will minimize the | | | | |