How to Hire a Financial Planner

When considering hiring a financial planner, what should you consider, an established planner that has been in practice many years or a new planner? There are advantages and disadvantages to hiring a new or experienced financial planner. First consideration should be are they a “fee-only financial planner” or do they receive a commission for the products they recommend. If you want an unbiased opinion stick with a fee only planner, one that has your best interest at heart rather than their own. Experienced planners will usually command higher fees which may put them out of your financial budget; the fees may be negotiated so do ask. Newer planners will likely charge you less, make sure that whichever planner you choose fits your personality and is someone you can work with. An advantage to hiring a newer planner is their ability to bring a fresh perspective from their academic and work experience. Their recent studies should also give them an edge when it comes to the technical areas of financial planning such as tax and estate planning, insurance, cash flow analysis, investments and employer benefit planning. It will be wise to interview several planners both experience and new to the profession before hiring anyone. I would suggest you interview at least two if not three planners, more if you are still not comfortable with the fit. Review their education, the two designations that demonstrate a high level of education are Certified Financial Planner (CFP) and Chartered Financial Analyst (CFA). If you are looking for investment advice, check to be sure they are versed in investment portfolio management. The credential to seek is the Accredited Asset Management Specialist (AAMS)  designation.

4 Smart Questions to Ask Before Hiring a Financial Advisor

1. How are you compensated? Advisors can be compensated in many ways, and the method of compensation is key to understanding whether you are getting what you pay for.

2. What is your training and your professional designation? The top financial advisor certifications is the certified financial planner or CFP

3. Are you a fiduciary? A fiduciary is held to a code which requires that the assets are managed for your benefit rather than      for his or her advantage. While you’d assume that all financial advisors are fiduciaries, it’s not true. In fact, stock or investment brokers, compensated by commission, are generally not fiduciaries.

4. What are your services and investment strategy? Before starting a conversation with a financial planner, figure out what you are looking for. Then find out whether the advisor’s services match up with your wants and needs.

Final words – Personally I have been in private practice since 1983 as a financial planner and certified as a CFP (Certified Financial Planner) since 1988. I retired my designation several years ago even though I still maintain my practice.

Daniel F Iuculano, AAMS CMFC

Accredited Asset Management Specialist

Chartered Mutual Fund Counselor