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How to Choose the Right Financial Planner

Is one of your New Year’s resolutions to get your financial house in order? If so, you’re not alone: saving more money and other financial goals usually crack the top ten most popular new year’s resolutions. But having a goal is not enough. It takes time and consistent follow-through to make these dreams a reality. Plus, for most Americans, it also means enlisting help, usually by way of a financial planner.

But how do you choose the right financial planner for you?

Find a Qualified Financial Planner.

The internet has made it easier than ever for people to promote themselves online with niche keywords and splashy websites. But is that self-proclaimed financial coach or financial boot camp webinar leader really qualified to give advice on your investments, or selecting the best healthcare plan for you and your family’s needs? No matter how good a person’s intentions, or how polished their marketing copy appears, make sure you choose a financial planner who has credentials that demonstrate they’ve got the necessary education and experience to qualify as a legitimate financial planner.

So how can you tell if a financial planner is qualified? Kenneth Price recommends, “The planner should have the CFP® Certification to demonstrate a basic level of understanding of the interrelated aspects of financial planning.” CERTIFIED FINANCIAL PLANNER® Professionals take part in educational courses that focus on ethical considerations and have a requisite 3 years of experience. They also pledge a fiduciary level of care, which means they’re legally obligated to put their clients’ interests above all others – including their own.

However, It’s important to note that financial planners working in the field can have qualifications other than being CERTIFIED FINANCIAL PLANNER®  Professionals, and that many of these financial planners may still adhere to a fiduciary standard of care. For example, all Investment Advisory Representatives at Per Stirling abide by the fiduciary standard. Nonetheless, asking whether the planner you meet with is a fiduciary is a great first question in a consultation. Other designations or credentials, like an MBA, can also point to a higher degree of competency in this field. Some may have decades of experience while only retaining the barest requirements for legally working as a professional in the financial plannery industry, including series titles and state licenses. Others may have highly specialized designations, like CDFA® (Certified Divorce Financial Analyst®) professionals, which could be advantageous for particular financial situations.

Choose a Financial planner Whose Values – and Value – Align With Yours.

Founders of Per Stirling, JP O’Sullivan and Robert Phipps understand that “performance” is a concept that means much more than just how your investments are doing. Delivering results that demonstrate improvements in people’s lives is one of the north stars which guides Per Stirling as a firm, as well as its employees, validated by earning the 2018 RecognizeGood’s Ethics in Business award.

Of course, understanding how your financial planner is compensated can help identify the value they will provide from a financial perspective. Kenneth Price recommends that “The planner should be compensated by you directly to avoid unnecessary or expensive product sales. If the planner is not compensated by you directly, then there could be a conflict of interest in the way of more costly investment vehicles that although may be suitable for you may not be in your best interest. If the planner is compensated by you directly there should be a higher likelihood that what they are proposing to you is best for you since they are not motivated to recommend one product over another due to more compensation.”

Not sure how to broach this topic? Ronsey Chawla offers a convenient way to break the ice on this topic with a few simple questions: “Tell me all the ways you get paid, both directly or indirectly. And do you have any financial conflicts in working with me?”

Choose a Financial Planner Who “Clicks” With You.

Chemistry is also a factor. “Talking about money is inherently intimate, and I like to underscore that point early in the first meeting with any potential client,” Per Stirling planner Angela Epley notes. “Citing numbers like salary earnings or retirement account balances is obviously part of the process, but so is talking about things like marriage, caring for dependents like kids or aging parents, healthcare issues, aspirations for the future, as well as anxieties that keep people up at night. Money touches all parts of our lives, so knowing how best to take steps to reach goals and plan for future curveballs requires a lot of detailed information that rely on a foundation of trust and transparency.”

Ronsey Chawla suggests focusing in on “shared experiences” as you’re choosing a new financial planner. “Can the financial planner understand and empathize with your unique circumstances and set of challenges when developing recommendations?” Martha Egli agrees, recommending people focus on finding a financial planner who’s relatable. “Say, for example, I have lived in California and I am working with someone who is transitioning from living in California: I personally know some of the struggles and challenges of interest to Californians, like certain taxes and other challenges homeowners and renters face.”

Another great way to choose a financial planner to suit your situation and goals is to ask your network of friends, family, and colleagues. Kenneth Price says, “The planner should come by way of a referral or provide references for you so that you can have some level of trust. It may be difficult get to that level from a 1.5 hour meeting particularly if you have had bad experiences in the past. If the planner comes by way of referral from someone you trust who used that planner for years, it can take some anxiety out of the vetting process and add peace of mind. If you are talking to references, it at least allows you the opportunity to ask the questions to get a better understanding and scope of the planner’s quality of advice.”

If you’re still unsure how to choose the right financial planner to help you, explore your options. Start your search with firms that have earned a reputation through awards or recommendations, especially if their websites feature financial planner bios you can explore to gauge a good fit. Then, schedule introductory face-to-face meetings with several you’re interested in working with to ask important questions to ensure a favorable match. Be sure to ask about compensation and an planner’s investment philosophy to ensure the likelihood of a better experience working together as you follow through on your resolution to get your financial house in order.