Choose a Great Financial Planner in 3 Easy Steps

Elaine King

“Well, Mom uses this financial planner for her personal finances, so she must be great,” your husband says. 

Begrudgingly, you agree to go to a meeting with this planner. However, you’re hesitant to jump in feet first. After all, you need help with a small business, not personal finances. Does she even have experience with businesses? You try to keep an open mind. But while she might be a great fit, it’s also true that she might not be the best choice. How can you really know?

While no one can predict the future, there are some standard questions and strategies you can use to find a financial planner who will really care about you and put your interests first. A personal recommendation is a great place to start when searching for a financial planner, but you should really dig a bit deeper before handing over control of your accounts. Here are 3 steps you should take to help you choose a fantastic financial planner:

1. Confirm the Planner Has Relevant Expertise

Just like some doctors specialize in general medicine while others specialize in orthopedics, many financial planners also have areas of expertise. Certified Financial Planner™ professionals go through training in various areas such as retirement, estate planning, insurance, and taxes. However, over time, some planners may build their clientele by specializing in multigenerational family businesses while others focus on the unique needs of individuals approaching retirement. 

In the example above, the husband suggests using a personal financial planner to manage the couple’s small business finances. It would be important to make sure the planner also has experience in small business. So, ask a bit about the planner’s past experience, the services they offer, and their client base. If you have a profile that’s similar to their current clients, then that’s great! You can also ask for references or testimonials so that you can learn more about their experience.

2. Investigate Credentials

First, you’ll want to make sure your planner is a Certified Financial Planner™ professional.   Anyone can call themselves a financial planner. So, to weed out those who really don’t have the relevant studies and expertise, it’s best to find a certified planner. CFP® certification is rigorous and covers a wide range of financial knowledge. Certified CFP® certificants are also required to update their knowledge through ongoing training. You can make sure your planner is registered and certified here

However many planners also have other relevant credentials. Find out what the credentials of your CFP® are and follow up. Other credentials that may be valuable in a financial planner include: 

  • Chartered Financial Analyst: These professionals are experts in investments and securities.
  • Certified Divorce Financial Analyst: These planners are experts in untangling finances during the process of separation. While most people try to avoid needing this specialist, if you do end up facing divorce, it’s a good idea to work with an expert who has this certification.
  • Certified Investment Management Analyst: CIMA certification is the mark of an excellent investment consultant and analyst. 

3. The Nitty Gritty Details: Costs and Conflicts of Interest

Finally, there are some nitty-gritty details to work out with your potential planner. Of course, you’ll have to pay your financial planner. But, how much will it cost? Are the fees fixed or commission-based or both? Typical fees are 1% of the assets managed. If you don’t have assets to manage, financial plans cost an average of $300 per hour. However, this amount is trivial when compared to the value you’ll gain for your financial life. All of this also depends greatly on your profile. Transparency in this area is essential as it will certainly have a big impact on your finances in the end. Be sure to understand this area thoroughly.

In addition, don’t feel awkward about asking whether or not the financial planner has any conflicts of interest. For example, some planners may offer insurance policies or mutual funds and maintain a relationship with the companies that sell these products. Financial planners are required to follow a strict code of ethics and put your interests first. So, transparency in these areas is essential. 

A good financial planner can offer guidance that will increase your financial well-being and help you achieve your financial goals. Make sure you find a great financial planner who really cares, and shares your values. By choosing this professional carefully, you can make sure you live your best financial life.

Elaine King is a Certified Finacial Planner(™) Professional and best-selling author with extensive experience working with families and individuals. Follow her on Facebook, Youtube, Instagram and Twitter for regular expert tips on financial planning.

Sources:Let’s Make a Plan (CFP® Board)

4531 Ponce de León STE #200
Coral Gables. FL 33146, USA.
Elaine King - Family and Money Matters™ 2021