Take into account the following five factors to make sure your financial advisor is knowledgeable about personal finances and impartial in his recommendations:
1. Planning Credentials: Possessing a prestigious financial planning certificate, such as Certified Financial Planner (CFP) or Personal Financial Specialist (PFS), shows that the person you intend to engage with has the training and experience required to act as a financial planner. Only those who have passed the certification standards for education and experience in personal financial planning are given the CFP and PFS qualifications. They must also pass the certification exams, consent to abide by the practice standards, and fulfill the ongoing education requirements.
2. Domain Knowledge: Financial planners are planning specialists, not necessarily domain experts. For instance, a financial planner will have tax analysis and planning skills, but unlike a Certified Public Account (CPA) or an IRS Enrolled Agent (EA), he may not always be an authority on tax regulations. Similar to this, he might be adept at developing an investment strategy, but unlike a Chartered Financial Analyst (CFA), he might not be an expert in the field. Work with a financial planner who is also an authority in the personal finance topics that are crucial to accomplishing your financial objectives.
3. Specialization in certain clientele: Not all financial advisors work with all kinds of customers. Most only offer specific types of clientele with particular profiles. For instance, a personal planner might develop his knowledge and tailor his services to only work with people and families in particular professions or stages of life who have particular financial objectives and net worth. To find out if the planner is a good fit for your situation and financial goals, find out if he exclusively works with clients that fit a certain profile.
4. Fee schedule: The fee schedule significantly affects whether he is best serving his client's interests or his own. A fee-only professional simply receives payment for their advise, but a fee-based expert additionally receives commissions, referral fees, and other financial benefits for recommending certain goods and services to you. The advice you receive from a fee-only financial planner is therefore more likely to be objective and in your best interests than the advice you receive from a fee-based financial planner. Consult a specialist whose fee arrangement is impartial and in your best interests.
5. Availability: You should be able to reach him or her at any time and expect them to be on time and attentive. Inquire of the planner how many clients he presently serves and how many clients he anticipates serving on a regular basis in the future. One of the most important criteria for determining your planner's future accessibility to you is the client-to-planner ratio. Additionally, find out whether planning tasks are normally handled by the planner vs those that are assigned to a paraplanner or other less experienced staff members. Last but not least, make sure the planner can be reached by phone and email during regular office hours.
Consult those who give a FREE initial consultation initially once you've narrowed down your selection of local financial planners to a few who are both qualified and objective. Examine the planner's availability and any other qualifications you are looking for in a financial adviser during the initial appointment.
In your quest to achieve your financial goals, having a knowledgeable and objective financial advisor at your side is crucial. To choose the best financial planner for your needs, take into account the planner's credentials, client specialization, subject matter experience, fee structure, and availability when looking for one."""