Cashay logo

Empowering your money

Finding a financial planner: Questions to ask

A good financial planner can help make the difference between meeting your financial goals and failure.

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.

An accountant helps a customer with his taxes at Latino Taxes in Oakland, California. (Photo: Justin Sullivan/Getty Images)
An accountant helps a customer with his taxes at Latino Taxes in Oakland, California. (Photo: Justin Sullivan/Getty Images)

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.

Financial planner designations and professional associations

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

You can help 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.

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.

  • 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.

Finally…

A financial planner with one of these certifications may be a good fit for you. Within certain guidelines, brokers and insurance agents can also offer you financial guidance and are licensed by the states in which they sell securities or insurance products. They generally earn commissions on the products they sell you.

It is up to you to decide who is qualified to give you advice. After all, it's your money.

Dive deeper: Using financial planners: How to make smart decisions

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

Read more personal finance information, news, and tips on Cashay

Follow Cashay on Instagram, Twitter, and Facebook