A great way to start your search for a financial professional is by posing questions to friends, family and business colleagues. It makes sense to ask those with whom you have something in common if they can recommend a professional. And, professionals who already work with other employees of your company may have valuable expertise in your company's retirement plan, compensation programs, benefits and stock option plans. However, because a professional will be working to help secure your financial future, it's important to base your decision on more than a friend's recommendation.
If your questions to friends and co-workers don't turn up any names of financial professionals, these websites provide a great start.
The Financial Planning Association's Planner Search is an easy-to-use nationwide database that connects you with CFP® professionals in your area, based on your specific needs.
The Certified Financial Planner Board of Standards' Search for a Certified Financial Planner™ Professional enables you to find a planner by last name or search by ZIP code. The database displays those authorized by the CFP Board to use the CFP certification mark.
The National Association of Personal Financial Advisors (NAPFA), a member association of fee-only financial planning professionals, allows you to search its membership.
Most investment professionals must fill out a form called "Form ADV" and file it with either the Securities and Exchange Commission (SEC) or the state securities agency in the state where they have their principal place of business.
The ADV consists of two parts. Part 1 contains information about the professional's education, business and whether they've had problems with regulators or clients. Part 2 describes the professional's services, fees, background and any disciplinary actions.
You can get copies of Form ADVs from the investment professional, your state securities regulator or the SEC, depending on the size of the adviser.
You can find out how to get in touch with your state securities regulator through the North American Securities Administrators Association Inc. (NASAA) or by calling 202-737-0900.
You can view an investment adviser's most recent Form ADV online by visiting the Investment Adviser Public Disclosure (IAPD) website.
The Central Registration Depository (CRD) is a computerized database that contains information about most stockbrokers, their representatives and the firms they work for. You can find out if stockbrokers are properly licensed in your state and if they have had run-ins with regulators or received serious complaints from investors. You'll also find information about the stockbrokers' educational background and work history.
You can ask either your state securities regulator or the Financial Industry Regulatory Authority (FINRA) to provide you with information from the CRD. Your state securities regulator may provide more information from the CRD than FINRA, especially when it comes to investor complaints. You can find out how to get in touch with your state securities regulator through NASAA's website and you can obtain CRD information by visiting FINRA's website or calling them toll-free at 800-289-9999.
You can also download a helpful brochure, "BrokerCheck" (PDF), from the FINRA site.
Also of interest: Get the most out of your financial adviser. >>