First, is the financial planner experienced? Years of education will do little if your advisor doesn't have the applied experience necessary. You should ask them about the breadth of the problems that they have solved, their existing clients, and their depth of experience. You may not consider your questions to be complicated, but you are likely unaware of the myriad of strategies the advisor could pursue in your behalf. It often takes years of apprenticeship for the planner to be prepared to approach the issues that you may face. This can be especially true in the areas of estate and tax planning. There are many novices out there presenting seminars with only a basic understanding of the principals they are teaching.
Second, what credentials does you consultant hold? You should be looking for legitimate and recognized credentials. Common credentials include: ChFC, CFP, CPA, CLU, JD, or other genuine designations. An advisor with only a CSA (Certified Senior Advisor) designation should be avoided. Designations such as this only require a quickie course and minimal knowledge of real financial principles.
Third, does the advisor have a commitment to high ethical standards? Look for membership in at least one industry association (such as NAIFA, Society of FSP, FPA, IBCFP, etc.) that enforces a code of ethics. Of particular concern in ethics are those that not-so-subtly use their church affiliation in advertising.
Fourth, is the advisor diligent in their continuing education? In an increasing regulated and governed environment, laws are constantly changing, and the economy is always in motion. Are they keeping up with current laws, and keeping on top of changes that affect their clientele? What level of study do they pursue (basic, intermediate, or advanced)?
Fifth, what kind of planning do you need? Will you need a comprehensive retirement plan, tax planning, and estate planning? Or do you just need help in one particular area? Find out if they are a glorified insurance salesman, or a bonafide financial planner.
Sixth, what is your advisor's support structure? Is he a solo-practitioner, or is he part of team of specialists that can strategize on the various issues? Is the firm large enough to have the resources to provide the services that you require?
Seventh, what is the advisor's average client like? Do you fall into the range of his typical client, and if not, will you receive the attention that you need? Would someone else at the firm give you better attention? What is the general demographic that the advisor primarily works with (seniors, pre-retirees, young couples, etc.)? You want to make sure that your unique needs will be met.
Eighth, how is the advisor compensated? Is he/she paid by fees only, commissions, or both? More about planner compensation in an upcoming article.
Finally, is your planner a professional? Be careful of planners that are running their operation out of the back of their car, lack memberships or designations, only work part-time, or mock those that commit to high standards. These advisors are often smooth talkers that will downplay the importance of the attributes that they lack. These individuals may be charming and present - 21511
Second, what credentials does you consultant hold? You should be looking for legitimate and recognized credentials. Common credentials include: ChFC, CFP, CPA, CLU, JD, or other genuine designations. An advisor with only a CSA (Certified Senior Advisor) designation should be avoided. Designations such as this only require a quickie course and minimal knowledge of real financial principles.
Third, does the advisor have a commitment to high ethical standards? Look for membership in at least one industry association (such as NAIFA, Society of FSP, FPA, IBCFP, etc.) that enforces a code of ethics. Of particular concern in ethics are those that not-so-subtly use their church affiliation in advertising.
Fourth, is the advisor diligent in their continuing education? In an increasing regulated and governed environment, laws are constantly changing, and the economy is always in motion. Are they keeping up with current laws, and keeping on top of changes that affect their clientele? What level of study do they pursue (basic, intermediate, or advanced)?
Fifth, what kind of planning do you need? Will you need a comprehensive retirement plan, tax planning, and estate planning? Or do you just need help in one particular area? Find out if they are a glorified insurance salesman, or a bonafide financial planner.
Sixth, what is your advisor's support structure? Is he a solo-practitioner, or is he part of team of specialists that can strategize on the various issues? Is the firm large enough to have the resources to provide the services that you require?
Seventh, what is the advisor's average client like? Do you fall into the range of his typical client, and if not, will you receive the attention that you need? Would someone else at the firm give you better attention? What is the general demographic that the advisor primarily works with (seniors, pre-retirees, young couples, etc.)? You want to make sure that your unique needs will be met.
Eighth, how is the advisor compensated? Is he/she paid by fees only, commissions, or both? More about planner compensation in an upcoming article.
Finally, is your planner a professional? Be careful of planners that are running their operation out of the back of their car, lack memberships or designations, only work part-time, or mock those that commit to high standards. These advisors are often smooth talkers that will downplay the importance of the attributes that they lack. These individuals may be charming and present - 21511
About the Author:
Hank Brock is president of Brock and Associates, LLC, a firm specializing in retirement, estate, tax, and business planning. Be sure to check out Hank's article on selecting a financial planner for more extensive information.
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