How do I find a reputable financial planner?September 28, 2011: 5:05 AM ET
We are looking for a financial planner. Is there a website that rates financial planners and shows if they are certified? If not, how do you find a good person? —D.R.H., Chicago
In addition to asking for word-of-mouth recommendations, you can start your search for a financial planner at any one of many websites. At napfa.org and garrettplanningnetwork.com, you can look for planners that charge fees for their services. The Financial Planning Association (fpanet.org) has a searchable database of thousands of planners. And the Certified Financial Planner Board of Standards has upgraded its online search service to help you find a certified financial planner (CFP): At letsmakeaplan.org, you can check that a planner is certified, as well as look up areas of specialization, minimum asset requirements, and method of compensation: fee only, commissions, or a combination.
Once you have some names, you should interview a couple of prospective planners to see if you're a good match. "We think it's important before you commit to working with a financial planner that you do your homework," says Kevin Keller, CEO of the CFP Board of Standards. Ask the planners how they work with clients, how frequently they'll be in touch, and what they charge.
Most importantly, see what questions planners ask of you. CFP's are trained to analyze your finances from a holistic view, and their questions should reflect that approach. What's your risk tolerance? How many years do you have to save for college? When do you hope to retire? How much insurance do you have? "Even if you have an army of brokers and accountants and insurance agents, you need a general to command that," says Keller.
Certified financial planners must take courses covering investments, taxes, insurance, retirement, and estate planning, pass a rigorous exam, have practiced for at least three years, and abide by a code of ethics that includes acting in your financial interest. Other designations that require experience and education include certified public accountant/personal financial specialist (CPA/PFS), chartered financial analyst (CFA), and chartered financial consultant (ChFC).
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