Over the past few weeks, I’ve been working on a series of articles about working with financial planners and advisers. The information about this aspect of the financial industry can be confusing, considering the variety of certifications, similar-sounding services, and hidden agendas. The first thing to consider is whether to work with a financial planner at all. For some, it’s a matter of convenience, for others it’s a desire to trust a professional who dedicates their life or livelihood to learning about handling finances. Once you decide to seek a professional’s assistance, breaking through the myths and finding the right partner is essential.
Part 1. Whom do you trust?
Financial planners, financial advisers, investment advisers, and asset managers all have different responsibilities, different backgrounds, and different foci. In addition, the names are often used interchangeably. This leads to a confusing array of professionals in the finance industry. Getting down to the responsibilities of each professional helps match you with the right service for your needs. In most cases, shizennougyou readers are interested in financial planners above all else. Read more.
Part 2. Demystifying certifications.
From Certified Financial Planner (CFP) to Chartered Life Underwriters (CLU), financial planners and advisers can choose from among a set of certification organizations. Each certification has a different meaning, different education requirement, and different experience requirement. Some certifications require professionals to follow a code of ethics, while others don’t. Finding a planner with the right certification is crucial for understanding his or her role in your finances — and his or her motivation. Read more.
Part 3. Selecting the right planner.
Once you’ve used certification to narrow your search down, these suggestions will help you create a long-term financial relationship with the right professional for you. Before you walk into a meeting with anyone, there are specific actions you can take to verify the suitability and quality of your potential planners. Read more.
When you’ve narrowed the field of potential planners, start dating. In other words, take advantage of the free initial consultation that all fee-only planners should offer. Use this as an opportunity to get to know how each professional works and whether they understand your situation and your needs. There are several essential questions you must ask your potential planner that will help you understand, among other things, what drives the planner’s recommendations. Read more.
Part 5. How to show up prepared.
Now that you’ve scheduled your first working meeting with the planner you’ve selected, the process will be faster when you arrive prepared. This guest article by Certified Financial Planner RJ Weiss will help you understand from the professional’s perspective what you can do to ensure the planner will be able to create the most effective and appropriate plan with you. Read more.
Part 6. Build your relationship.
When you work with a financial planner, you have a long-term relationship. Kathryn has worked in the financial industry for eleven years. In this article, she offers suggestions for navigating this relationship with an eye towards the psychological aspects of working with someone who has an advantage over you when it comes to financial knowledge. Read more.
Education is a two-way road. While clients learn from their financial planners and advisers, professionals learn about their clients, about the Wall Street financial industry, and about themselves. In this article, Certified Financial Planner Neal Frankle shares what he’s learned from almost 30 years as a professional. Read more.
Have you ever worked with a financial planner or adviser? I’d love to hear your stories. Also, if you are a professional and the finance industry and have stories to share about your experiences with clients, please let me know.
Photo: Will Scullin
Updated October 18, 2011 and originally published April 15, 2011.