Wednesday, November 19, 2014

How to find a good Financial Planner

Rosemarie Boyd, CFP

How to find a good Financial Planner

When I listen to talk radio, I am always amused by the number of “Financial Planners” who are freely advising people on how to invest their money.  That is not necessarily a bad thing, but the question becomes are the people giving advice actually doing financial planning.
The confusion arises from two problems.  First, there are no restrictions as to who can use the term “Financial Planner”.  The restrictions apply only to those people who wish to call themselves Certified Financial Planners or CFPs. In order to be able to use the CFP® designation, one must complete a course of study, pass an intense exam at the end, and adhere to a strict code of ethics, which dictates how the CFP® deals with clients. In order to maintain the designation, one is required to fulfill thirty hours of continuing education every two years.  Two of those credits are ethics related.
The second problem has arisen as a result of a decision made in the late 90s which allowed stock brokers, to sit for the CFP® exam without ever intending to actually do planning.   Instead of helping the public, this further muddied the waters by creating “CFPs” and “CFP® Practitioners.”  If you are looking for a real planner you want the CFP® Practitioner.
If you are looking for a financial planner, the following are some steps to guide you:
1.      Use a referral source.  Talk to your friends and relatives to see whether they have used a planner.  If no one has a name, you might start with
2.      Once you have a name, check this person’s credentials through  This is the official web site for the CFP Board of Standards.  Check also with your local Better Business Bureau.
3.      In interviewing a potential planner, ask for the name of referrals.  A good planner will have asked permission of clients to use their name as a referral source.  Try to get references of clients who have been with the planner for ten plus years, and, for whom the planner has done similar work.  If a client has had a long standing relationship with his or her planner, that person must be doing a good job for the client.  If the planner refuses to give references, consider that a BIG RED FLAG.
4.      Call for an initial appointment which should be free of charge.  Make sure that the chemistry between the two of you is working and that you do not feel any pressure.  Listen to your inner voice!  If you do not feel comfortable, that is to be considered another red flag.
5.      Clearly understand how the planner is paid and what the approximate cost might be.  What happens to the fee if you are not satisfied with the work?  The issue is less how the planner is paid, but more that the potential client fully understands where all fees (and any commissions) come from.  Full disclosure is extremely important.

6.      Finally, and most important, look for independence not someone who is working for an insurance company or a particular brokerage firm.

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