Choosing Financial Advisors

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All About Certified Financial Planners

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Certified Financial Planners
Evaluate Potential Financial Advisors

Just about anyone can call himself or herself a retirement financial planner or offer financial retirement advice. However, there are numerous criteria and strategies you can use to evaluate potential candidates.

Get a Referral

You may want to get a referral to a financial advisor from someone who understands the industry. (Click here to find prescreened independent financial advisors from NewRetirement.com.)

You might also want to ask your friends, colleagues or family members for a reference.

Review their Qualifications

Some financial advisors are Certified Financial Planners (CFPs). Certified Financial Planners need to have three years' work experience, a Bachelor's degree, have passed a two-day exam, and signed an agreement to abide by the CFP Board's Code of Ethics and Professional Responsibility and Financial Planning Practice Standards. This designation is offered by the Certified Financial Planner Board of Standards and also assumes that the planner meets certain ethical requirements.

There are other qualifications to look for in a financial planner, although some excellent planners may not meet every one.

  • Many financial planners are also certified public accountants (CPAs), a national qualification for accounting and tax preparation. It is important to find out if the CPA also is certified as a Personal Finance Specialist (PFS), a designation awarded by the American Institute of CPAs.
  • There is also the Chartered Financial Consultants (ChFC) certificate that is awarded to people who have completed a personal finance program offered by The American College.
  • Many states require licensing that ensures the financial planners have passed exams.
  • If the planner is going to potentially sell you insurance or securities – they should possess the proper licenses to do so.

Understand Your Needs

Before choosing a financial advisor, you should consider your needs. If you are interested only in investment advice, you should choose a financial advisor with specific experience in this area. On the other hand, if you are more interested in a comprehensive financial retirement plan, an investment broker may not be the best fit.

Evaluate Costs

The costs charged by financial advisors have been debated and there is no clear consensus regarding what constitutes a reasonable fee.

At the very least, a financial planner should clearly disclose their fee structure in advance. Whether you choose a fee only financial planner, a commission based financial planner or someone compensated by some combination of these methods, your choice should be based on an assessment of you needs as described above.

Interview Financial Advisor Candidates before Making Final Choice

It is important that you be able to trust and respect the financial advisor you are working with. In addition to gauging whether or not you will be comfortable planning your financial life with this person, you should understand how the advisor works.

Questions to Ask a Financial Advisor

  • Understand their investing strategy
  • Review a sample financial plan
  • Consider their risk profile – how much or little risk do they recommend their clients take
  • Inquire about any disciplinary action or complaints they have received
  • Request and review information about their qualifications and licenses
  • Ask them if they have any real or potential conflicts of interests between their clients and the recommendations they make
  • Discuss how the financial planning process works
  • Ensure that the advisor carries liability insurance

Check References

You should ask for and check references of any financial planner you are considering hiring. Ideally the profiles of the financial advisor's existing clients are similar to your own.

Talk Today to a Financial Advisor!

Let us match you to a certified retirement planner for a FREE one on one telephone session.

Do you have enough savings?

How should you invest?

Can you afford retirement?

Get a FREE one on one consultation!
FREE CONSULTATION

It is easy to get the answers you need!