3 steps to finding and hiring a financial planner

  • A financial planner can help you plan for retirement, create an investment portfolio, budget your money to reach your financial goals, and much more.
  • When looking for a financial planner, be sure to consider their majors and certifications.
  • You should also consider how financial planners will charge, which can range from a flat fee, an hourly rate, a proxy, a percentage of assets, or a commission.
  • Find a financial advisor near you with SmartAdvisor.

Hiring a financial planner can help you achieve your short- or long-term goals — such as having a comfortable retirement, financing your child’s tuition, or buying a home.

These professionals are not one-size-fits-all, and finding the right person is critical to your success. Here’s what you need to know about financial planners and how to focus on the best ones for your goals and budget.

Understand your financial needs

To choose the right financial planner, you first need to understand what you are trying to achieve. Are you looking to maximize your retirement money? Do you want to earn more from your investments? Is planning your estate and legacy a top priority?

Financial planners usually have majors, so you’ll want to choose one that closely aligns with your goals. Popular financial planning specialties include:

  • estate planning
  • investment
  • Retirement Planning
  • business planning
  • debt management
  • budget
  • tax planning
  • insurance

There are also planners who specialize in certain life stages, demographics, or even people with certain occupations.

Says Jay Zygmont, CFP® Planner and Founder Childless Wealth, which focuses on financial planning for adults who choose not to have children. “You’ll find planners who specialize in nearly every group, occupation, and life stage, so find one that works for you.”

Choose a financial planner from a Asset Allocation Consultant Also important. This means that they should avoid conflicts of interest and always put your interests first.

says Jason Steno, president of the financial advisory firm Corcap Investments in Southfield, Michigan.

1. Find Financial Planner Options in your area

There are many ways to find a financial planner near you. A good place to start is often asking friends, family members, and colleagues, as they can recommend local planners they have personal experience with.

You can also use one of these online resources, all of which allow you to filter by geographic region:

  • Financial Planning Association: The FPA tool allows you to search for CFP® professionals in your area, and you can filter by specialty, compensation type, and certification.
  • National Association of Personal Financial Advisers: With NAPFA’s search tool, you can enter your zip code and can filter planners based on their distance from you. There is also a map that you can use to view all of your options in one place.
  • Let’s make a plan: This is the Standards Certified Financial Planning Board’s research tool. You can search by location, services offered, or both. All planners listed are CFP® professionals.
  • XY chart grid: Tool XY allows you to search for fee-only financial advisors (more on this below) in your area. You can search by location and filter the results using various keywords and disciplines.

Once you have shortlisted some names, review them BrokerCheck.com and with Securities and Exchange Commission. There, says Steno, “you can find out how long they’ve been on the job or if they have any history of discipline.”

2. Review the credentials of a financial planner

There is no single “financial planner” license or certification. As Steno said, “Anyone can call themselves a financial planner.”

To make sure you choose an experienced and knowledgeable professional, look for professional designations such as CFP®, CFA, or CIMA. These are just a few credentials a financial planner can look for, and they each refer to a different major or skill set.

Here’s a look at some of the credentials you might see:

  • CFP®: a CFP .® It is a certified financial plannerTM. These professionals must have a bachelor’s degree, at least three years in full-time financial planning, and complete a board certification program. CFP® programs must also take 30 hours of continuing education every two years.
  • CFA: CFA Professionals must take a three-part exam focused on investment tools, assets, wealth planning, and portfolio management in order to be certified.
  • Sima: CIMA-rated professionals are Certified Investment Management Analysts. CIMA is required to have three years of financial services experience and to enroll in a CIMA taught course at Yale School of Management, The Wharton School at the University of Pennsylvania, University of Chicago Business School, or the Investment Management Research Program. in Australia.
  • MRFC: The MRFC is a Registered MSc Financial Advisor. These professionals need at least four years of full-time financial planning experience, have a bachelor’s degree in accounting, economics or finance, and complete 40 hours of continuing education each year.
  • ChFC: ChFCs are certified financial advisors. They must have at least three years of full-time business experience, complete 27 credits of courses, and earn 30 credits of continuing education every two years.
  • Convention on the Rights of the Child: This is a certified retirement advisor. They must have two years of professional retirement planning experience, pass a specialized certification exam, and take 15 hours of continuing education courses annually.

You can usually find a schema’s credentials listed after their name – either in their online search resources under Step 1, in their professional profile, or LinkedIn account.

3. Review fee structures

There are many ways a financial planner may charge you, so make sure you understand how they are charged before working with them. Some services are charged based on the assets or investments the scheme manages, while others charge a flat fee or receive commissions. How you charge fees can affect how much you will ultimately spend working with a financial planner, so it’s always important to research this part beforehand.

Here is a look at some of the different fee structures that financial planners use:

  • Fee onlyFee planners are paid only for the services they provide. This could mean an hourly rate, a flat fee, or a cut-off of some sort. Fee planners don’t just receive commissions or commissions from the products and policies they recommend.
  • AUM: Assets under management is another fee-only approach. With this fee structure, you will pay a set percentage of the total assets managed by your scheme.
  • commission: Authorized financial planners are compensated based on the products they sell to you. This can cause conflicts of interest, as it motivates them to recommend certain products, even if they are not best suited to your needs.
  • On the basis of fees: The fee-based model is a combination of fee and commission structures. You may pay a fee for the scheme’s service, and they may also get a commission for certain products they recommend to you.

In general, most professionals recommend looking for someone for a fee only, as this ensures that they have your best interests at heart. This includes asset-managed models, which incentivize the scheme to grow your assets (and avoid losses).

“It ensures that the counselor’s interests align with yours,” Steno says. “They want to increase the value of your assets just as you do.”

Online Financial Planners vs. Traditional Planners

You don’t have to meet a financial planner in person to get professional help. Many financial planners offer online services that allow you to get the guidance you need without leaving your home. These usually include phone calls and video calls, where by default you “meet” your scheme via Zoom, Skype, or any other similar service.

This can be a good option if you want a faster and more convenient service or to work with a scheme that is not in your geographic area.

There is, too robotic advisors, which can be used to build and manage your investment portfolio. They are usually more affordable than using a realistic advisor and have lower starting balance requirements, but are also less comprehensive and personalized. Robo advisors will not usually assist with budgeting, estate planning, tax planning, or other non-investment services.

As Rob Burnette, an MRFC and CEO Outlook Financial Center In Troy, Ohio, he explains, “Robot advisors are only useful for the investment portion of the financial plan.”

In some cases, bot advisors may include interactions with a live advisor (sometimes for an additional fee). But it’s usually not a professional dedicated to the account, and you may be limited to the number of times you can interact with them. This means less consistency and less personal guidance than you’d get with a financial planner you hired directly.

says Chris Maksimovich, CRC Consultant and Head of global wealth advisors Based in Louisville, Texas. “They lack customization and input and do not provide manual catch during periods of market volatility.”

bottom line

A financial planner can help you achieve your long-term goals but you need to choose your goals carefully. There are many types of financial planners, and their specialization, costs, credentials, and services should play a role in your decision.

Don’t be afraid to interview some candidates. Set up introductory meetings with two or three professionals, take the time to ask questions, understand their processes and fees, and make sure they are a good fit before moving forward.

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