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A financial planner can help you reach your investment goals

Personal finance, budgeting, and retirement planning aren’t exactly common topics around the dinner table. There are a group of individuals who live and breathe these topics: financial planners. Financial planners enjoy numbers, budgets, retirement planning, and investing. They can help you meet your financial goals, without having to do all the heavy lifting yourself. Follow this advice to ensure that you choose the right financial planner for you.


Do know what you're looking for

The field of financial planning is vast. Before you start your search, it’s important to know what you want to gain from of using a financial planner: Do you want a retirement plan, an asset protection plan, a plan to get out of debt, and/or get on a budget, etc.?

Delve deep and ask yourself detailed questions, so you know exactly what you need from a financial planner: What stage of life are you in? What phase of life do you want help with? Do you want someone to primarily focus on the present? 10 years from now? When you retire?

Having an understanding of what you want out of a financial planner will quickly help you narrow your search to those planners who would best fit your current goals and life circumstances. 

Do interview more than one

It’s important to shop around. You want to interview more than one to get a good understanding who is out there and what products are offered. Many planners offer free consultations or introductory classes, so it shouldn’t be hard to get a chance to meet multiple planners. During this step of your search, you shouldn’t have to pay to meet with them.

Do know the financial planner’s specialty

Every financial planner is different. Each will have his or her own investment philosophy and skill set. As you shop around, you’ll find some planners are better at specific aspects of planning than others. As part of your search, you’ll want to ask planners what their specialty is. You don’t want a “jack of all trades.” You want someone who is an expert in a particular aspect of financial planning.

Do check references

When you want an accountant, you know to look for a CPA (Certified Public Accountant). In financial planning, it isn’t that easy. There are many different certifications all created by different organizations. Examples include CFA, CFP®, CIC and ChFC®. In reality, checking a financial planner’s work experience, performance records, and personal references will give you a much better picture of their level of expertise than that of a designation. The best way to check a planner’s experience is to ask for references or look for reviews from previous clients. 

Do understand who actually manages your money

Many times, the planner you end up talking to and meeting with ultimately isn’t the one who will be managing your investments. Oftentimes, planners have professional relationships with professional money managers and traders who manage their client’s funds. If your planner isn’t the one actively managing your portfolio, you’ll want to get the information on who is and do some of your own investigating.


Do not go to a brokerage or insurance firm

If you're looking for a fee-based financial planner, going to a brokerage or insurance firm to find one isn’t a good idea. The majority of the planners working for these large companies are paid on commission to sell investment products to you. They may claim that they are only fee-based, but chances are they are still also getting commissions on the backend. As a result, they will be more motivated to sell you products (mutual funds, insurance, annuities etc.) that will give them the highest commission rather than recommending products that are in your best interest.

Do not forget to monitor your progress

Part of having a successful relationship with your financial planner is consistent communication. You want to have a planner who actually wants to talk with you, and meeting once or twice a year isn’t enough. You are always going to be the best manager of your own money, so work with a planner that is willing to meet once a quarter.

Do not let age be a factor

I am often asked whether or not age is important in choosing a financial planner. It can be hard to follow financial advice from someone who seemingly has less life experience than you do. However, when it comes to financial planning and management, age rarely has any bearing on the quality of services you’ll receive. As long as you’ve checked their references and, more importantly, their work experience, age isn’t an issue.

Do not assume there is one fee

A fee-based financial planner often charges for other services in addition to his or her time. When managing your money or setting up legal structures for you, there are often additional costs to doing so. Be particularly careful when it comes to your investment portfolio. Fee-based planners charge management fees to manage your money—just like everyone else. Check what those fees are up front, and request a list of affiliated relationships. For example, some planners who do not work for a brokerage firm may receive a kickback from a brokerage firm if they offer their clients specific investments or mutual funds. You want to know exactly how your planner gets paid.

Do not invest in things you don’t understand

We have all seen the investment scandals that have made the evening news. A group of investors think they are investing in some hot new thing that is going to make them rich, but the story always ends the same way: the financial planner runs off with the money leaving their clients to pick up the pieces.

Having a financial planner is not a free pass to financial success. Even if you're not managing your money directly, you are still responsible for it. You need to understand what investments or products a financial planner is offering. If you don’t understand it, you shouldn’t be investing in it—even if your planner tells you he or she is making the same investment. 

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There are many different styles of financial planning out there. With a bit of searching on your part you can easily find a good fit. Doing your homework on financial planners is just as important as the investment decisions you’ll make with your financial planner. The right planner can mean the difference between financial success and financial failure.

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Jason WhalingFinancial Educator

Jason Whaling is the founder and CEO of The Wealth Titans. A financial education company dedicated to the training and development of individuals to reach their financial goals. Jason left his professional career as an accountant working at a la...

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