Determining who is best qualified to help you reach your financial goals, understanding what they can do for you, and getting clarity on how they get paid for their services may be a challenge if this is all new to you. Here are some useful tips to find the right financial professional to help guide you through your financial matters.
Designations The finance industry excels at creating financial designations for every conceivable financial situation. If you are looking for a financial planning generalist who can help you with most issues, look for someone with either a CFP®, ChFC® or CFA® designation. A Certified Financial Planner® (CFP®) is the dominant designation for financial planners. The Chartered Financial Consultant® (ChFC®) designation is similar to CFP®. A Chartered Financial Analyst® (CFA®) is an expert in investment management, but has also studied the basics of financial planning. In addition to one of these designations, many financial advisors who work in the divorce area also have a CDFA™ designation (Certified Divorce Financial Analyst®).
Background Check Once you find some candidates with the right credentials, do your homework and check out their website to see how much experience they have and if they indicate any specialty. You should also look into whether they have had any disciplinary issues with regulators, by performing a FINRA BrokerCheck® search. The Financial Industry Regulatory Authority (FINRA) has a file on every advisor working with a FINRA-registered brokerage firm at www.finra.org/Investors/ToolsCalculators/BrokerCheck
Initial Meeting Questions Most financial planners will be happy to sit down with you for an initial meeting at no cost or obligation. The initial meeting is your chance to learn more about the financial planner and their business, to explain your situation and learn what services the planner offers. The following are some essential questions to ask at the initial meeting.
What experience do you have? The financial planner may have significant financial experience but it is the experience they have counseling individuals that really matters.
What is your approach to financial planning? Ask what types of clients and financial situations the advisor typically works with. For example, a planner that specializes on working with business owners may not be the best choice if you are newly divorced and in need of budgeting help.
What services do you offer? Some financial advisors may focus on helping you with your investment needs, where others will also provide comprehensive financial planning (i.e. retirement, education, estate, tax and budget planning). Many planners expect to manage your portfolio along with the other services that they offer. Financial planners may also be good resources for and work closely with tax accountants and attorneys.
Do you work alone or with a team? Financial planning is often done with a team approach where several specialists will assist the lead planner. When your financial planner is in meetings, it is good to know if there is someone else in the firm who can answer your questions or take care of basic requests in a timely manner.
How much do you typically charge? How do I Pay for your services? Financial planners may charge for their services in several ways. If they are only creating a plan for you, it may be a set project price or by the hour. If they are will be managing your investment portfolio on an on-going basis, they may earn a commission on the investments or a charge a fee based on the size of your portfolio.
There are numerous questions that you should consider based on your own situation. Remember that you are under no obligation in this meeting. If you intend to work with this planner over the long-term, it may take more than one meeting to determine if they are the right fit for you. Whatever planner you decide to work with, make sure you know what services will be provided and how the planner will be compensated.
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