top of page

Money Monday: Tips for Choosing a Financial Planner

Don’t sign up for the first financial planner who comes along. Use these valuable tips to make the right choice in this very important matter.

By Bridget McCrea

Up until now you probably handled financial matters on your own. Maybe you were in college and are now working full-time, perhaps you just got married, or maybe you recently moved into your own apartment. Regardless of the life change that you’re going through, chances are good that a financial planner can help you make some solid choices today and in the future.

Financial planners come in all shapes and sizes. Before you pick one, consider these five tips for selecting a professional who will work in your best interest and guide you in the right direction:

1) Look for a financial planner with the letters “CFP” after his or her name. These folks have passed a rigorous test administered by the Certified Financial Planner Board of Standards about the specifics of personal finance. CFPs also have to take ethics classes and continuing education in order to keep their designations current.

2) Learn how to discern between commission-based and fee-only planners. Commission-based planners take a cut of the profits that they generate for you, and some charge per transaction. Fee-only planners (typically members of an organization called the National Association of Personal Financial Advisors [NAPFA]) generate revenue through client fees (hourly, retainer, or both) that typically equal about 1 percent of your annual assets.

3) If you’re just starting out, consider picking an hourly-based planner. These planners are usually new to the business and eager to build their companies by referrals. They can help you with investments, taxes, retirement planning, and myriad other financial matters on a per-project basis. Over time you may want to transition to a more “holistic” approach — with the planner on retainer year-round — but for now having a professional working in your corner on an hourly basis may be enough.

0 views0 comments
bottom of page