Choosing a financial planner is as important as choosing a doctor or lawyer. Working with a financial planner is a very personal relationship. In addition to competency, a financial planner should have integrity, trust, and a commitment to ethical behavior and high professional standards. You want a planner who will put your needs and interests first.
Also, many planners specialize in working with specific client types, such as small-business owners, executives, or retirees. Many have minimum income and asset requirements. Some specialize in certain areas of planning, such as retirement, divorce, or asset management. This is why we recommend that you interview at least three CFP® professionals to find the right one to serve your needs.
What information should I ask for?
Request a written disclosure document from the planner. This may either be a financial planning contract or what's called a Form ADV, if your planner is an Investment Adviser, or an equivalent brochure. This should answer many of your questions. You may then want to follow up with a personal interview, which many planners will do for free. Visit www.plannersearch.org to get started.
Basic information to learn
Ask about:
- Financial planning and other financial designations the planner holds
- Educational background and work experience
- Licenses to sell certain financial products, such as life insurance or securities
- Services the planner provides
- The planner's basic approach to financial planning
- Areas of specialization
- Types of clients the planner serves, and any minimum net worth or income requirements
- Professional affiliations, including membership in the Financial Planning Association
- How the planner prepares a plan
- How the planner might address your needs
- Whether the planner or others will implement recommendations from the plan
- Business relationships that might present a conflict of interest
- How the planner is paid for services and typical charges
Trust your instincts
A face-to-face or virtual interview should give you a sense of the planner's personality. Does the planner seem forthright in their answers? Do you have a sense of trust and rapport? Is the person focused on your needs rather than selling products?