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How to find a financial planner

At a glance:

There are many financial service professionals out there to choose from. But almost anyone can call himself or herself a "financial planner." The financial planning engagement is too important to leave to chance.

You need to know whether a particular practitioner is capable of providing the services you need at a price you can afford. Exercise the same due diligence in choosing a financial planning practitioner that you would for a doctor, lawyer, or other professional.

The types of financial planners

One way to seek out a financial planner is to look for an individual who holds a financial planning license or certificate.

You can identify a planner by any of the following designations:

  • Certified Financial Planner (CFP®)

  • Chartered Financial Consultant (ChFC)

  • Chartered Financial Analyst (CFA)

  • Personal Financial Specialist (PFS)

Planners with these titles have generally completed several years of intensive study in financial planning, passed a comprehensive financial planning test, and have previous experience working in the financial planning field. A code of ethics is usually a part of each designation as well.

Several financial planning authorities give out these licenses. You can contact them to find a licensed financial planner in your area. These include the following:

CFP Board

The Certified Financial Planner Board of Standards gives out the CFP exam, maintains a code of ethics, and sets re-licensing requirements for CFPs.

Jacquelyn Davis, of Brooklyn, New York, meets with an accountant at H&R Block on April 15, 2015 in New York City. (Photo: Andrew Burton/Getty Images)
Jacquelyn Davis, of Brooklyn, New York, meets with an accountant at H&R Block on April 15, 2015 in New York City. (Photo: Andrew Burton/Getty Images)

American College

This independent college in Pennsylvania provides many different degree programs in financial services and insurance, including the CFP and ChFC.

American Institute of Certified Public Accountants (AICPA)

This national professional association awards the Personal Financial Specialist certification to qualified CPAs.

CFA Institute

Formerly the Association for Investment Management and Research (AIMR), this international organization of investment professionals has a Chartered Financial Analyst (CFA) educational program.

Your first step in locating the right financial planner may be to contact the organization that serves the kind of professional you need. Most will be happy to provide a referral to members in your area.

Financial planner professional associations

One resource for finding a financial planner is the various professional associations that serve them. By identifying the various planning associations and understanding which professionals they serve, you can better locate a financial planner who is suited to your needs.

Society of Financial Service Professionals

The Society of Financial Service Professionals has been assisting financial planners for over 80 years. Members of the Society already have professional credentials or are currently working toward a professional certificate or license.

National Association of Personal Financial Advisors

The National Association of Personal Financial Advisors (NAPFA) is made up of financial planners who charge fees for their service rather than commissions on financial products they sell. Financial planners in NAPFA are not paid by any outside companies or agents to sell you specific products or services. They agree to be paid only by their clients.

Financial Planning Association

The Financial Planning Association serves all financial service professionals. The FPA welcomes all financial planners and other professionals involved in any of the particular disciplines of financial planning.

Though all related professionals are welcomed, the FPA does promote the attainment of a Certified Financial Planner license by anyone who practices financial planning. They also promote this license to the public as the designation of choice for financial planners.

Each of these organizations will be happy to provide a referral to their members in your geographic area.

What to ask a financial planner

Once you have located a financial planner, you will want to make sure the planner is right for you. Here are several questions you should ask any financial planner before you hire him or her.

Questions to ask

  • "What experience do you have?" Find out how long the planner has practiced and what areas he or she is an expert in. This will give you an indication of whether or not the planner's expertise matches your goals.

  • "What designations and licenses do you hold?" Find out whether the planner is registered with the state as an investment adviser or to sell securities or insurance. This lets you know whether you might need to work with other advisors in addition to your planner.

  • "What services do you offer?" This varies greatly depending on the planner. Some planners offer advice but don't sell products. Others may provide advice only in specific areas.

  • "How do you charge and do you sell financial products for an outside company?" Your planner will charge by fee only, commission only, or both fees and commissions.

  • "Describe your approach to financial planning." Make sure your planner's approach isn't either too cautious or aggressive for you.

  • "Will you provide references?" It is always important to get the scoop from other clients.

You can use sites such as http://brokercheck.finra.org/ or http://www.adviserinfo.sec.gov/IAPD/default.aspx. Doing your research now will help you avoid misunderstandings and disappointment down the road.

Your financial future may hinge on the advice of your financial planner; take the time to be sure you're hiring the right one for you.

Summary of finding a financial planner

Once you have decided to hire a financial planner, you will need to be able to pick the right one for your needs. Planners differ from one another in the kinds of services they provide and in the way they are compensated. One good way to start is to seek a referral from one of the professional associations that serve financial planners.

Check a prospective planner's credentials and be sure to ask about the planner's education, background, and compensation, as well as for referrals. Sometimes choosing one planner over another boils down to whom you feel most comfortable with. It's your money; it is too important to leave to chance.

This content was created in partnership with the Financial Fitness Group, a leading e-learning provider of FINRA compliant financial wellness solutions that help improve financial literacy.

Read more information and tips in our Planning section

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