Choosing Your Financial Professional
By Elaine E. Bedel, CFP
Course Section
Choosing the right professional to help you with your money is possibly as important as choosing a doctor. You want someone you can talk to, feel comfortable asking questions, and have the confidence that the advice is credible and on target. As a financial planner, I know how important it is to establish a strong working relationship with my clients. Once my client and I are on the same "wave length," we are able to communicate effectively and find solutions to issues more quickly.
Everyone needs a financial plan. Some people can do it themselves with assistance from online calculators, financial planning literature, and investment research. Others choose to hire financial planners and let them take care of everything. Most people probably fall some where in between.
You could have many reasons to seek the services of some sort of financial professional at some point in time. Many times a sudden change in your financial or life situation, such as an inheritance or serious illness, requires immediate attention. Or, you may look for a financial professional because you do not have sufficient time or a keen interest in doing the necessary research to make financial decisions on your own.
If you are looking for financial professionals, always seek information about what services they are offering, what licenses are needed to do this, their educational background and experience, how they will work with you, and how they get paid for their services.
Education and Experience. When interviewing potential professionals, you need to know about their education background and their experience level. Today there is no shortage of persons wanting to provide you financial advice. They are in brokerage houses, banks, insurance companies, accounting firms and independent companies. Since most knowledge is gained on the job, you want to make sure the professional's area of expertise matches your needs.
Services Provided. Determine how the financial professional will work with you. Get an explanation of the steps that he/she will use to understand your situation, provide their analysis, and make the recommendations. Ask whether a written plan is provided and what type of follow-up you can expect. You will also want to check out whether the financial professional is properly licensed to assist you in implementing any recommendations.
Compensation. Financial professionals are compensated in three ways: fees from clients, commissions paid by a third party, or both fees and commissions. During your first contact with a financial professional, whether by phone or in person, be sure you get specific information about how he/she will be paid. Remember there is "no free lunch". If the advisor indicates that the financial analysis and advice are free, you can safely assume that the professional is compensated through commissions on product sales or transaction fees.
Professional Designations
Several professional designations require a candidate to have specific levels
of education and experience to qualify. The Financial Industry
Regulatory Authority has an excellent website that explains what a person
has to do to get the designation or certification.
Summary
Choosing a financial professional is an important task. Secure the names of
several either through referrals from friends or business associates or through
your own research. Interview each candidate either on the phone or in person.
Ask your questions and review the information they provide. You'll want a
professional who can match your needs and be someone you are comfortable with.
After all, you will be sharing your information with this person and putting
your future financial well-being in their hands.
AARP Resources
What Questions to Ask During the Interview
Get a checklist of questions that you want to ask during your first
interview.
Which Professional is Right for You?
There are many types of financial professionals. Learn the differences and how
they are paid.
How Can You
Find Financial Professionals?
Ways to find financial professionals.
Elaine Bedel, CFP®, is a personal financial planner with over 25 years of providing financial planning and investment management for executives, professionals, and entrepreneurs. She is the President and Owner of Bedel Financial Consulting and has served as Chair of both the Financial Planning Standards Board and Certified Financial Planner Board of Standards.
