grill him or her on credentials and professional affiliations. Remember, too, that most planners must file a Form ADV with federal regulators. The ADV is of utmost importance to you. It’s documentation that outlines how many years the planner has been working, fees that he or she charges, and whether any disciplinary actions have been taken against the planner. Beware: the ADV comes in two parts; planners are required to show you only one part, but ask to see the entire document to be absolutely sure you know as much as you can about the person you’re dealing with.
There are other checkpoints as well. Your local Better Business Bureau is always good, as well as your state’s securities and insurance regulators. Check the Securities and Exchange Commission in Washington, D.C. (www.sec.gov, 202-942-4320) to see if your planner has ever run afoul of federal rules. And, if your planner is also a stockbroker, you should check the National Association of Securities Dealers (NASD) (www.nasdr.com, 800-2899999) to see if there have been any judgments or disciplinary actions taken against your advisor.
As hard as fathoming titles can be, it’s also difficult to get a handle on just what financial planners do, if only because there are so many facets to our financial lives these days. We’re asked to balance the purchase of a home, retirement savings, college tuition for our kids, in addition to a budget for cars, food, clothing and furniture. What’s more, the financial services industry can seem like a Hydra, the mythical nine-headed snake slain by Hercules. There are growth, aggressive growth, growth and income, load and no-load mutual funds; there’s whole-life insurance and term insurance. And, to make things worse, the list doesn’t stop there.
Experts say it’s best to stick to a simple plan. Have your financial planner listen to your goals and then point out ways for you to attain them. Your planner should map out strategies to follow, the risks involved and the time frame required. Then, should you entrust your finances to a planner, make sure they report to you every time they need to make a move. Put together, these pieces will help you draw up a sound financial blueprint.
SOMEONE TO HELP
It only goes that if you’re overwhelmed like most of us are by the myriad choices and decisions we must make, a financial planner can help. That’s not to say that choosing one is the easiest thing to do. Take the Jacksons, for instance.
There came a time, a few years back, when Dawn and Scott decided to turn a corner of sorts. College sweethearts, the two had stuck together since meeting freshman year at Hampton University. They’d gotten married, and hit the working world in tandem, too. There were good times and they honeymooned and kicked up a little sand in the Caribbean. Now, however, Dawn, 29, and Scott, 30, felt the time had come to start a family. But before rushing headlong into parenthood, they felt there were obligations they had to