At some point in your life you’ll most likely start wondering how to manage your money. Maybe you’re thinking about retirement or investments. Maybe you have no clue what you need to do, but you want help making decisions about your financial future. Once you start thinking thoughts like this, it is time to find a financial planner.
I wish it were as simple as Googling “financial planner insert your city here“. Unfortunately, it isn’t that easy. Just like many other professions, there are plenty of financial planners out there who are motivated by selling you things you don’t need.
With the help of my brother in law, who is a certified financial planner, I’ve put together this list to help you figure out how to choose a reputable financial planner.
Trust– First and foremost, pick someone who you trust. Word of mouth is powerful here. Ask your friends, family, coworkers, your accountant and any other financially savvy people you trust. You want to make sure your financial planner is honest and ethical.
Series 7 license– Financial planners can get many different licenses and some of them are much easier than others. Many people get an insurance license that allows them to call themselves financial advisors. Find a financial planner who has taken the Series 7 licenses. This takes months of studying and allows the financial advisor to discuss and offer a variety of investments to meet every type of client. Even better, they won’t be trying to push insurance on you that you don’t need!
CFP® designation – You’ll want to find an advisor who is a Certified Financial Planner. In order to obtain this designation the advisor must have a bachelor’s degree, take a variety of college level courses in areas of taxation, investments and insurance, have at least 3 years of experience in financial advising, and pass the CFP® exam. The exam only has a 40% passage rate, which means you know your financial planner is the best of the best. A CFP® also has to swear that he will always be a fiduciary to the client, meaning he is legally obligated to always work in the client’s best interest. Why does this matter? Because any other “financial advisor” can legally sell things for a big commission, even if it isn’t in the best interest of the client.
Find an independent financial advisor– It’s quite possible that you’ll find a great financial advisor with a big firm such as Merrill Lynch and Edward Jones. The only flaw is that these financial advisors have sales managers that are telling them what to sell to their clients. If you choose an independent financial advisor you won’t feel pressured to buy things you don’t need because they aren’t trying to meet sales quotas. LPL Financial, Ameriprise and Raymond James are three examples of large brokers that work with independent financial advisors. The main thing you want to avoid is someone who works for an insurance company and calls themselves a financial advisor. Most likely they are only trying to sell you insurance that you might not need.
Use Broker Check– FINRA, the regulatory agency for financial advisors, publishes the following information: customer complains that resulted in litigation, if the financial advisor has ever been fired or forced to resign because of misconduct, any financial trouble they have experienced as well as if they have committed a crime. You should be able to find plenty of financial planners who have worked in the business without any of these problems.
If you follow these tips, you’ll be able to find a very reputable financial advisor. It’s a huge decision to put your money in someone else’s hands and it shouldn’t be taken lightly. Many people I know have been taken advantage of by financial advisors who are not reputable. Please do your homework and find one that will take care of you instead of taking advantage of you.
Over the next couple of weeks I’ll do a follow up on how financial planners get paid and questions you should ask your financial planner when you meet with them.
Special thanks goes to my brother in law, Dustin Rinaldi. He is CFP® and owns Rinaldi Wealth Management which is affiliated with LPL. He is helping me with this series and has provided me with so much valuable information. If you are in Southwest Florida and looking for a financial advisor, I highly suggest contacting him.
Do you have any more tips? Have you used a financial planner?
Thanks, Hannah (and brother in law!), this is very very helpful. A friend of mine gave me the card of someone who works with Edward Jones recently (she hadn’t used him but “he’s very very nice”) but I hadn’t called him yet. We do need to use someone as our strategy is… no strategy at all, actually. We’re USAA members and they have free financial planning services, I believe, so my husband would rather we go through them but it’d have to be on the phone and honestly, I’d rather sit down with someone and speak face-to-face. ‘ I didn’t know about the CFP designation, I’ll have to ask if anyone has that at USAA :) We’re not in Southwest Florida (though I try to spend a couple of days on Sanibel Island every year or two!) or I’d go see your BIL!
Can’t wait for the other posts in the series :)
We will have to have a mini blog conference next time you are in Sanibel! I bet you’ll be taken care of with USAA. Just be weary of them selling you things you don’t need. I think that is the biggest take away from this article.
Great tips – we love ours. He helps us with so many decisions and makes us feel at peace with our future! :)
Peace! That is a great word to use. If he makes you feel at peace, you are in good hands!
Hi
Thank you for coming to the Inspire Me Monday Linky Party on Monday. I’m Janice, one of your hostesses. Yours in the most Inspirational I’ve found so far, but I only just started reading. Check back tomorrow to http://mycurrentnewsblog.com to see if you got chosen as the most inspirational post.
Can’t wait to check it out tomorrow! Thanks!
As per my own analysis, choosing a Reputed financial Planner is quite difficult. But one can easily get it identified my checking that a Financial Planner is not selling you any single financial product to you while consulting. If he/she is doing so, that he is an agent and not an Financial Planner. Planner only advise you about financial products depending upon your needs and not on his/her choice.
I didn’t know that there was anything like a broker check out there. I would hope that finding someone trustworthy wouldn’t be hard. Even if it does take some homework, it is worth finding someone good.
Definitely worth it!
Would this idea of getting different licenses in the same financial planning industry mean that each financial planner has a different set of skill? When I need a service like financial planning, I want to be able to choose from, small differences, not large ones like accreditation and so forth. That just seems like a very big deal to me.
Great Post! Yes i think finding a good financial planner is more difficult in today’s and thanks for sharing this article will help people to choose right financial planner for there wealth
I agree finding someone who is certified. I would do my research in finding someone I can trust. Usually good financial planners will have their degrees and certificates posted in their offices. I am preparing for retirement myself and am looking for help.
Great post! We should find a planner with successful experience advising clients in the same stage of life as you.
Thanks for the ideas for finding a good financial advisor. Now that I am approaching full adulthood, I need to find someone to help my wife and I with our finances. I didn’t know to check for the Series 7 license, but I like that idea! I will remember this, for sure.
Up until this point I had sworn off financial planners and advisors as I have just always been very entrusting and for the most part I don’t understand the lingo but this is so helpful as it gives me a place to start! Thanks so much for sharing!
Hi,
Glad to see your post!! It is really amazing and informative!!
You must choose the right financial planner for you. For this, you can do many things.
Before you even start looking for a financial planner, take the time to write down some important questions.
You might also want to delve into the background and education of your potential financial planner, since both can have a profound impact on the quality of advice and the level of service you receive. An advisor who graduated with honors from a top school should be able to provide excellent advice and guidance, while one who just squeaked by in a lower tier school might not be as competent.
Thanks for this amazing and useful post! Keep share more!
Regards
Lyle L. Ketner
Choosing a financial planner can be difficult, but if they have the CFP designation it is a huge plus. Thanks for sharing this advice!
Hi,
very informative tips. Because being financially strong or weak doesn’t give us another opportunity to retake our wrong decisions. A financial advisor is responsible for such kind of circumstances, if arises ever.
Thanks for sharing
Nice tips for choosing financial planner.Because success depends totally on financial planner.It is also important to check license.Thank you so much for sharing such nice tips!
Such a nice information how to choose our financial adviser. I am totally agree with this because without financial adviser we can save, invest our money in right way. These tips will help us to find out a good and experience holder financial adviser. Thanks for sharing this wonderful and informative article.
A big thanks for the article!
There are plenty of great financial advisors and planners out there and with a little work anyone can find one. Following the steps above is a fantastic start.
Thanks again Hannah