The Right Stuff

When it comes to selecting an advisor, options. Here's how to make the best choice.

and respect is probably the best way to go,” says Dwayne Grady, a financial planner with American Express Financial Advisory Services in Wilmington, Delaware.

Grady ought to know: most of his clients-from Washington, D.C., to New Jersey-have come from referrals.

One such client is Darren Comedy, an architect in the nation’s capital, who says he’s pleased he took the time to hire Grady as his personal financial planner. Darren and his wife, Caren, now have what he calls a “nice game plan” that guides them through everything from investing in stocks and bonds to maintaining the right kind of insurance policies.

Once you’ve come up with a list of potential financial planners, your next step is to contact them. Ultimately, your task is to weed out those individuals who, for one reason or another, might be unsuitable for you. Whittle down the field by assessing each individual’s merits based on background and experience, products and services, and compensation.

Begin your inquiry by asking about the advisor’s educational and professional history. Find out where he or she went to school, what degree(s) were earned and, of course, whether the person has any credentials recognized in the industry, such as the CFP or the Chartered Financial Consultant (ChFC) designation.

Find out how long the person has been a financial planner and for which firms he or she has worked. You can request references, although you should be aware that some advisors don’t give out the names of their clients because of privacy concerns. Nonetheless, look for someone with a proven track record.

After checking out a planner’s education and work history, get an idea of the services the advisor offers. Some merely pitch various investments, while others specialize in just one narrow area of financial planning. Try to avoid both types, except in special circumstances. In general, it’s a good idea to seek out advisors who offer a range of services.
Broadly speaking, there are six areas of financial planning:

  • Cash management and budgeting
  • Insurance services
  • Investment planning
  • Tax advice
  • Retirement planning
  • Estate planning

Tukufu Zuberi, Ph.D., a professor of sociology and chairman of the African Studies Center at the University of Pennsylvania, says that kind of detailed, comprehensive financial planning has given him peace of mind. He’s gone through the ups and downs of picking a financial planner. Zuberi was solicited by a planner in 1991, and agreed to become a client. All too quickly, however, it became apparent to him that his advisor was irresponsible. “He kept coming to me with all these investment ideas and saying he was going to make my money grow, but they never worked,” says Zuberi.

The problem was that the advisor “never wanted to talk to me-except when he wanted to sell me stock,” Zuberi recalls. He eventually fired the advisor and went through two more at the same firm before switching companies. Finally, in 1994, he found a planner who suited his needs.

By that time Zuberi had become a tenured faculty member, begun work on a book and pondered the best ways to

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