Have you ever wondered what’s the best way to dig yourself out of debt, save your hard-earned money or invest for the future? If so, you may need the services of a financial planner. Contrary to popular opinion, financial planners aren’t just for wealthy individuals. In fact, experts say that hiring a financial planner has less to do with what you have than with what you want to have.
“Anyone who has financial goals and objectives” but doesn’t feel completely comfortable coming up with their own strategies “should hire an advisor,” says Elissa Buie, president of the Denver-based Institute of Certified Financial Planners. And at certain critical junctures in life-such as when you’re getting married or starting a family, purchasing a new home or planning for retirement-solid financial advice becomes imperative.
black enterprise has decided to revisit this subject because it’s important to all aspects of your life. (See “Seeking An Investment Advisor,” November 1998.) To make the process a little easier, here are some step-by-step guidelines that can help you find the planner who’s right for you.
STEP ONE: GATHER NAMES
The very first thing to do is obtain a list of potential advisors. Contact professional associations whose members are financial planners. You can call the Institute of Certified Financial Planners (ICFP) at 800-282-PLAN or tap into their Website at www.icfp.org. The National Association of Personal Financial Advisors (NAPFA), located in Buffalo Grove, Illinois, can be reached at 888-FEE-ONLY or www. napfa.org. To contact the International Association for Financial Planning (IAFP), headquartered in Atlanta, call 800-945-4237 or log on to www.iafp.org. These organizations will provide you with the names of planners in your area. Individuals with CFP (Certified Financial Planner) after their names have received the highest designation in the profession.
In fact, the CFP designation is viewed as the benchmark in the financial planning industry for several reasons. First of all, the appointment was specifically designed by and for financial planners, and didn’t grow out of any other profession, such as accounting, sales or insurance. Additionally, to receive the CFP designation, advisors have to jump through a number of hoops, all of which are designed to ensure a basic level of education, experience and professionalism. To become licensed, they must successfully complete a rigorous examination (which currently has only around a 50% pass rate); sign a code of ethics whereby they promise to abide by the highest standards of conduct; take continuing education classes; and have a minimum of three years’ experience in the business.
Still, consumer rights groups warn that professional credentials alone aren’t enough to guarantee that you receive sound financial counseling. Experts say that there are good and bad planners with the CFP title-and those without. Therefore, it’s up to you to really do your homework.
In addition to securing names from professional organizations, get referrals from colleagues, friends or family members. A personal testimonial from a reliable source can help you during your search.
“If you’re just getting started and you’re a little nervous, word of mouth from someone you trust