Financial Planning

How Do I Choose a Financial Planner?

Having the option to manage your own money may be appealing, but there may come a time when you need some help. Talk with a financial planner to get the guidance you need to help you reach your goals.

Choosing a Financial Planner: What to Consider

Having options in life and the choice of being able to do things yourself can be a good thing. For example, you may feel confident enough in your abilities to do a multitude of minor household repairs and maintenance. However, if there ever comes a time to replace the electrical system in your house, the option of doing it yourself might not be the smartest choice.

The same analogy may also apply to money management. Sure, you have the choice of managing your finances yourself (and perhaps have been for a number of years), but there comes a time when you might need some additional help and guidance with things such as retirement and/or estate planning.

By working with a financial planner, you can tap into a wealth of experience that can help you get that much closer to reaching your goals. But with so many different professionals to select from, how do you chose?

Here are three basic considerations when looking for a financial planner:

  • Professional designations.

    There are different types of professional designations that a financial planner may have, depending on the products they sell and the type business they conduct. One widely recognized credential is the Certified Financial Planner (CFP) designation. Not only does this signify that they have passed the required exam, but are regulated by The Financial Oversight Board that sets and enforces standards for its professional members. Moreover, a certified financial planner is required to take mandatory continuing education courses to maintain their CFP designation. If your financial planner doesn't have a CFP designation, find out more about his/her education and industry experience.

  • Academic background and experience.

    Many financial planners have an academic background in areas such as economics, mathematics, and/or business, with many qualified individuals possessing a Master's in Business Administration (MBA). And don't forget to ask about their professional experience as well as how long they've been in business. If you're still not completely convinced, ask for references.

  • Pay structure.

    Generally, many financial planners earn their living three ways: either from commissions, by charging hourly or flat rates for their services, or via an asset-based advisory fee. A commission-based planner is paid a fee whenever a stock or other investment is bought or sold, while an hourly or flat rate planner is paid his/her fee for their counsel. Advisory fees are charged as a percentage of the value of the assets being managed. A good rule of thumb to ask about fees upfront so you're not hit with an unwelcome surprise.

Take the time to ask important questions before choosing someone to manage your finances. After all, it's your money.

Was this article helpful?
15
19

All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.

WEB.1397.04.15