What Should I Look for in a Financial Planner?

So your youngest kid just graduated from college. You just realized you have 30 years of work history. You found a notebook from your first year at work and you notice a goal you wrote down: “Retire by age 50.” This year you will celebrate your 55th birthday. You’ve been saving into the 401(k) at work and have a “pretty good amount” saved. You will pay off your mortgage in five years. You have some money in the bank. But you aren’t quite sure how to decide when you can retire.

Maybe it’s time you talked to a financial planner. But where do you start and how can you be sure you select a qualified person?

What’s a good financial advisor?

A survey conducted in November 2014 by ORC International for CFP Board found that consumers value certifications, training and experience when choosing a financial advisor. Here are some of the highlights of what the investors surveyed prefer:

• Advisors who look at and integrate all areas of financial life (81 percent) are preferred over someone who specializes in one or two areas (19 percent).
• Advisors with certifications matter to 61 percent of all respondents.
• Advisor training should be comprehensive professional training and not just product training from their company. Sixty-six percent of those surveyed say they would change advisors over this matter.
• Both training and a comprehensive exam are seen as important by 86 percent. It’s not just enough to take a couple classes. It matters that you have to pass a rigorous examination to prove you have mastered the material.
• The respondents want every advisor to have a least a year of training, but three or four years of training is better (72 percent).
• Most respondents want to discuss training and certifications (82 percent) before selecting an advisor.

How to find a good financial advisor

In general, I would suggest this process:

1. Sort your candidates by qualifications (like the CERTIFIED FINANCIAL PLANNER™ designation) and location (it will be easier to work with somebody nearby). An internet search will get this done in a couple minutes and the CFP Board’s database of CFP® professionals is very user friendly.
2. Call a few advisors and talk with them about your situation. Notice which ones will actually speak with you on the phone. I always talk with prospective clients on the phone so we can both get an idea of whether we are a good fit together.
3. Set meetings with two or three advisors to make your final selection. More than one meeting gives you important frame of reference to feel good about your final choice.
4. Come to the meeting prepared. Bring some questions. Your goal in this meeting is to understand how this advisor works. What will it be like to be a client of this person? Here are 10 questions to consider:
   • What experience do you have?
   • What are your qualifications? What credentials do you hold? Why did you choose those credentials?
   • What financial planning services do you offer?
   • What is your approach to financial planning?
   • What types of clients do you typically work with?
   • Will I be working with you or will I be working with your team?
   • How will I pay for your services?
   • How much do you typically charge?
   • Who else stands to gain from the financial advice you give me?
   • Have you ever been publicly disciplined in your career?
5. Pay attention to chemistry. You are considering an advisory relationship that deals with a lot of personal information and some very important goals. Be sure you are comfortable and at ease when you deal with the advisor.

I suggest you look for a Certified Financial Planner™ professional who is always their client’s advocate – a fiduciary advisor – and who only works for their clients – a fee-only advisor. One way to do that is to search the CFP Board’s database of CFP® professionals.

If you are looking for more help on selecting a financial planner, check out the Wall Street Journal and Investopedia.

If you are looking for a financial advisor and would like to learn more about working with me, I would be honored to talk. Call the office at 612-436-3770 or e-mail rdunn@dunncreekadvisors.com. I am always happy to talk with new people. Dunncreek Advisors does not provide legal or tax advice, nor is this article intended to do so.