How to Choose a Financial Planner

Six vital questions to ask before doing business

financialplanSo, you’ve decided you need some assistance meeting your financial goals? Great. A financial planner can be an immense help setting up budgets and devising a broad plan for your saving and investing. But opening your private financial details, spending habits, and aspirations to a professional is a deeply personal choice. Having the right questions for a planner is critical. Here are six questions to ask financial planners before you decide to work with one:

What experience and qualifications do you have?
Find out how long the planner has been in practice and their overall career history. Ask the planner to briefly describe her work experience and how it relates to her current practice. Ask the planner whether he or she is recognized as a Certified Financial Planner (CFP), a Certified Public Accountant-Personal Financial Specialist (CPA-PFS), or a Chartered Financial Consultant (ChFC).

Have you ever been publicly disciplined for any unlawful or unethical actions in your professional career? Several government and professional regulatory organizations, such as FINRA (formerly NASD), state insurance and securities departments, and CFP Board keep records on the disciplinary history of financial planners and advisors. Ask what organizations the planner is regulated by and contact these groups to conduct a background check.

What services do you offer? Generally, financial planners can’t sell insurance or securities products such as mutual funds or stocks without the proper licenses. They can’t give investment advice unless registered with state or federal authorities.

How will I pay for your services and how much do you typically charge? The planner should tell you—in writing—how she’ll be paid for her services. Even without a clear sense of your particular needs, the financial planner should be able to offer an estimate of costs.

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  • Carole Thompson

    Ms. McCrea,

    My name is Carole and I live in Indiana. I’m in a bet of a crisis right now in that the company I work for has a contract with the state and it is ending come December 31, 2009. I have placed applications and resumes with several other companies and nothing so far. My dilemma at this time is what should I do about my 401K. Need to transfer it or place in an IRA or something soon. I’d rather not have it sent to me and have to pay taxes on it. What should I do? I love some suggestions. Thank you.

    • vielka

      I am sorry that I am just reading this. I hope you did not cash in your 401K and that by now you have a job. You have some choices with the 401k you can leave it with the firm you were until you get a new job that offers you a 401k and you can transfer it then or you can transfer it to a IRA or Roth Ira.

      Good Luck

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