How to Choose a Financial Planner

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A financial planner is a type of financial adviser who can help you set and meet long-term goals like saving for your children’s college education, retiring by a certain age or planning out your estate. Some financial planners double as investment advisers, which means they can also help you with your investments.

However, choosing a financial planner can take some time, as you want to ensure you’re making the right call for you and your family. If you want help finding a financial adviser or planner, consider using SmartAsset’s free matching tool.

Understanding Financial Planning Services

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Financial planning is the process of taking a comprehensive look at your financial situation and building a specific financial plan to reach your goals. This can involve multiple areas of finance, from investing and retirement to taxes, your estate, insurance and more. Financial advisers who manage investments for clients often double as planners themselves, offering their services on a stand-alone or recurring basis.

Identify Your Needs

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Understanding what you’re hoping to accomplish by hiring a financial planner is a critical first step in finding the right professional to work with. A person looking for a money manager has different needs than someone who is looking for a holistic financial plan that touches on retirement planning, philanthropic giving and tax planning.

Your financial planning needs may encompass a variety of topics, including:

  • Retirement planning
  • Education saving
  • Debt analysis
  • Estate planning and trust creation
  • Philanthropic giving
  • Insurance needs
  • Tax planning
  • Business exit planning

By assessing your financial situation and identifying your personal needs, you can narrow your search for a financial planner and hire the right one. For instance, if you need specific help creating a trust and planning your estate, you’ll naturally want to hire an adviser who offers estate planning services. If you’re looking for someone to manage your money, in addition to creating a full financial plan, you’ll focus your search on advisers and/or firms that offer comprehensive wealth management.

Research Potential Financial Planners

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Once you’ve determined what kind of services you need from a financial planner, you can begin to compile a list of potential candidates.

Perhaps you limit your search to advisers in your area or rely on the recommendations of friends and family. You can also use online databases to find advisers in your area. Here are several services to consider:

  • Garrett Planning Network
  • XY Planning Network
  • National Association of Personal Financial Advisors
  • Financial Planning Association

When you’ve put together a short list of potential planners, you’ll want to start looking into their backgrounds, levels of experience and any certifications they may have. Here’s a look at some of the most common financial certifications:

  • Certified financial planner (CFP)
  • Chartered financial analyst (CFA)
  • Accredited investment fiduciary (AIF)
  • Certified public account (CPA)
  • Chartered financial consultant (ChFC)

When researching individual financial planners, be sure to visit their firm’s website to see what kinds of services they offer and whether they align with your needs.

Financial planners who are registered with the U.S. Securities and Exchange Commission (SEC) must submit documentation each year about their business, which can also be helpful to examine. This paperwork, known as Form ADV, will include the firm’s services, fees, investing strategies and more. Form ADVs also list disclosures of any legal or regulatory infractions the firm and/or financial planner has on their record. Depending on the seriousness of the disciplinary action, a disclosure may deter you from working with a particular adviser.

Examining a Form ADV may seem overwhelming at first, but it’s an essential step to take when choosing an adviser. SmartAsset’s Form ADV guide can help you navigate and make sense of these regulatory documents.

Interview at Least Three Financial Planners

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Now for what is likely the most important step of the process: interviews. After putting together a short list of candidates, arrange a time to meet or speak with each one. Most advisers offer consultations, during which they will introduce themselves, talk about what they can offer you and address any questions you may have.

Even after researching the individual and their firm, be sure to ask about their fee structure, financial planning approach, how many clients they work with, and whether they are a fiduciary. Advisers who are registered with the SEC have a fiduciary duty to always serve their clients’ best interests. Knowing that a financial planner abides by fiduciary duty can give you the peace of mind knowing that your adviser must put your interests first.

When choosing a financial planner, be sure to interview at least three candidates. You may be tempted to hire the first person you meet. However, speaking with at least three financial planners and comparing those conversations can provide important context in your search.

Bottom Line

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Working with a financial planner can help you secure your financial future and reach your goals. Whether it’s retiring, buying a home or sending your kids to college, planning ahead is super helpful. The foundation of your search should be understanding your own personal needs and finding a planner who suits them.

When the time comes to make your decision, you’ll have a lot of information to consider. Ultimately, though, you’ll want to choose the financial professional with whom you feel most comfortable with. Trust is a critical component of the adviser-client relationship, so finding a professional who you can trust is vital. After all, this person will be playing an important role in your financial life.