Choosing a Financial Planner The Most Important Financial Decision You’ll Ever Make By Mark Helm, Arlington Financial Volunteer
What the Wrong Decision Costs You Money Time Life Legacy
Who Should Consider Hiring a Financial Planner? Not Just the Wealthy Anyone who lies awake at night worrying about financial issues Anyone not willing to read books on financial topics, such as insurance or investing
Five Steps to Choosing a Financial Planner Gather names Separate the wheat from the chaff Meet the candidates Follow the money Consider your needs
Gather Names Financial Planning Association (www.fpanet.org) National Association of Personal Financial Advisers (www.napfa.org) Certified Financial Planner Board of Standards (cfp-board.org) Accountant or attorney Friends and Family
Separating the Wheat from the Chaff Credentials Certified Financial Planner (CFP) Chartered Financial Analyst (CFA) Chartered Financial Consultant (ChFC) Personal Financial Specialist (PFS) Accredited Financial Counselor (AFC) Business Degree
Meet the Candidates Feel Comfortable Financial Expert vs. Salesman Experience and Education Specific Questions
Meeting the Planner: Expert vs. Salesman Don’t be impressed with the name or office Comprehensive planning vs. Investing Does the planner promise to beat the market (Hint: Good planners usually bear bad news on returns) Investment philosophy Long-term Buy-and-Hold vs. Frequent trading Index Funds
Meet the Planner: Experience and Education Look for business or economics degrees Less important if they have credentials Consider previous experience Have they worked major brokerage house or a small planning firm If from another field, ask why they left and why their previous experience helps in this field How many years in financial planning
Follow the Money: How Does the Planner Get Paid Commissions Fee-based Fee-only
Follow the Money: Problems with Commissions Who’s the boss Churning High-priced products
Follow the Money: Fee-only Assets Under Management Annual retainer Hourly fee
Consider Your Needs Investment advice vs. Comprehensive financial planning Specific situations Do-it-yourself vs. Hiring a manager
STEPS REVIEWED Gather names Separate the wheat from the chaff Meet the candidates Follow the money Consider your needs