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Finding A Financial Planner [NASE Experts]

Aug 14, 2012

At some point in many of our lives we come to the realization that we haven't socked away enough money for those financial milestones. Things like our kid's college education or a comfortable retirement. For some reason we think there's plenty of time: later when our business is generating high profits. The reality is that most of us are afraid to take our financial temperatures, afraid of what we might discover. So, unless you’re in a wealthy relative's will the time for some serious financial planning is NOW.

It’s time to look at your lifestyle, how you want to live in the future, and how much money it will take. After scratching your head for a few hours trying to figure out where to start, you might come to the conclusion that you need some professional help. Someone who can do some number crunching and help you reach for your goals. You might need the help of a financial planner!

Someone who can help you:
Determine what financial goals you realistically want.
Create a budget and plan to reach those goals.
Evaluate types of investments.
Maintain an ongoing program to keep you on track.


Once you've decided to turn to a pro, you face the difficult task to find the right one. Not all financial planners are created equal and using the wrong one could turn into a nightmare. Unlike licensed professions like CPAs, attorneys, and investment brokers, anyone can call themselves a financial planner.

Who They Are:

Most financial planners have a series of letters after their names. The most prestigious is CFP which stands for Certified Financial Planner. These individuals have completed extensive studies in finances and demonstrated a level of ability. Frequently letters after a persons name refer to non-descript certifications, which may or may not qualify them to help you establish a good financial plan. The rule is to ask what the certifications mean and why it qualifies them to guide your financial future.

How They Charge:

There are three ways financial planners charge for their services. The first is a straight commission where you generally don't pay a fee for their services. While this might sound good, under this method the financial planner receives a commission on investments they sell (if they are a licensed investment broker). A less then ethical commissioned person could put you into poor investments just to earn higher commissions.

The second type is the fee only planner or portfolio manager. They charge a straight fee for their services ranging from a few hundred dollars to several thousand dollars depending on how complex your plan is. In the case of the portfolio manager, they charge a percentage of your portfolio so the better you do, the better they do. This type of professional doesn’t earn commissions on where you invest so they generally give you more unbiased guidance.

The third type is a meld of the above two. The planner charges a fee and may also receive commissions or fees from the investments they sell their clients.

Where to Find Them:

The best place to start your search is with personal referrals from friends and business associates. Someone you trust who has experience with a financial pro and can substantiate a person’s expertise. Another approach is to contact your local chamber of commerce or go online with an Internet search.

Do your due diligence:

Interview at least three pros:
What is their educational background? 
What financial planning designations have they earned?
How long have they been doing financial planning?
Will they provide at least three current client references?
What is the planning process they go through and how long does it take?
Have they been cited by any professional or regulatory body for disciplinary reasons? 
How do they charge?

 If you don't have a solid plan for your financial future, get started now. And unless you're the next Warren Buffet, a good financial planner could be worth their fees many times over.

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