Money Essentials

How to find a financial planner

Follow these tips to find the best match for your needs.


Talk to experts and they'll tell you to interview at least three financial planners before hiring the one who will, presumably, help guide you to success and riches.

Of course, the thought of tracking down one prospective planner, much less three, can be daunting. How are you supposed to find them? Sure, plenty of people advertise planning services but let's face it, responding to these come-ons doesn't sound exactly prudent.

That's why references from friends and colleagues are a valuable way to start your search. After all, if your sister-in-law can vouch that she's had five years of great experience with a planner, then by all means, follow up on the referral. But you also have to be careful that you have similar financial needs as the person who gives you a recommendation.

If you and your spouse are saving for your first home, for example, you probably shouldn't hire a planner whose typical client is worth millions. You may be able to get good advice, but you'll likely end up paying fat fees to obtain it, and you can count on being less of a priority to your adviser than his wealthier clients.

That's why you should turn to groups who certify planners with special credentials or certifications. While no credential or license can provide a 100% guarantee against fraud or incompetence, they do provide good assurance that you'll work with an expert who's trained and reputable. That's because many industry groups will strip a planner of a credential if that person fails to do business in a professional, ethical manner.

Moreover, some groups require advisers to reapply for credentials by demonstrating that they've kept current with relevant planning issues. If you've obtained professional references from friends or co-workers, use planning groups to check up on these referrals.

If you have no idea how to find a planner, or you need a few more candidates to interview, start with the Financial Planning Association (800-322-4237), which lets you search for planners by location or specialty. Look at your search results and seek out financial planners who have a CFP (Certified Financial Planner) credential from the Certified Financial Planner Board of Standards.

At that point, your job is half done. The Financial Planning Association does not verify credentials; it just lists planners. You'll next have to verify a planner's CFP status and background with the CFP Board of Standards.

Another option? Look for a Certified Public Accountant who's earned the Personal Financial Specialist credential (CPA/PFS) from the American Institute of Certified Public Accountants. You'll get a double dose of assurance that you're hiring a trustworthy pro. CPAs must be licensed by the state they work in, so you can check their records to see if they've had complaints or disciplinary actions filed against them. (The National Association of State Boards of Accountancy can put you in touch with officials in your state.)

Of course, being a CPA doesn't necessarily make someone a planning whiz, which is why you should look for the CPAs with a PFS credential, too. In order to earn it, an accountant must pass the AICPA exam covering major planning aspects from retirement planning to risk management, sign an ethics pledge, have a minimum amount of professional experience and keep current with tax and planning issues.

Finally, be aware that training, credentials, and professional reputation only go so far. Ultimately you've got to feel comfortable with your financial adviser, and no reference or degree can tell you if a planner is right for you. For that, you've got to meet her face-to-face and ask the right questions.

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