3 Steps to Finding & Hiring a Financial Planner

  • A financial planner can help you plan for retirement, build an investment portfolio, budget your money to reach your financial goals, and much more.
  • When looking to hire a financial planner, make sure to consider their specialties and certifications.
  • You should also consider how financial planners charge, which can range from a flat fee, hourly rate, retainer, percentage of assets, or commission.
  • Find a financial advisor near you with SmartAdvisor.

Hiring a financial planner can help you achieve your short- or long-term goals — like having a comfortable retirement, funding your child’s college tuition, or buying a house. 

These professionals aren’t one-size-fits-all, though, and finding the right one is critical to your success. Here’s what you need to know about financial planners and how to zero in on the best one for your goals and budget.

Understanding your financial needs 

To choose the right financial planner, you first need to understand what you’re trying to achieve. Are you looking to maximize your retirement funds? Do you want to make more from your investments? Is planning your estate and legacy top of mind?

Financial planners typically have specialties, so you’ll want to choose one that aligns closely with your goals. Common financial planning specialties include:

  • Estate planning
  • Investing 
  • Retirement planning
  • Business planning 
  • Debt management
  • Budgeting
  • Tax planning
  • Insurance

There are also planners who specialize in specific life stages, demographics, or even people with certain occupations. 

“When looking for a financial planner, it is important to understand exactly what you’re looking for,” says Jay Zigmont, a CFP® planner and founder of Childfree Wealth, which focuses on financial planning for adults who choose not to have children. “You will find planners who specialize in just about every group, job, and life stage, so find one that fits you.”

Choosing a financial planner who’s a fiduciary is also important. This means they must avoid conflicts of interest and always put your interests first.

“A planner that operates under the fiduciary standard is required by law to always keep your financial best interests ahead of theirs,” says Jason Steeno, president of financial advisory firm CoreCap Investments in Southfield, Michigan. 

1. Search for financial planner options in your area 

There are many ways to find a financial planner near you. Asking friends, family members, and colleagues is often a good place to start, as they can recommend local planners they’ve had personal experience with. 

You can also use one of these online resources, all of which allow you to filter by geographic area:

  • Financial Planning Association: FPA’s tool lets you search for CFP® professionals in your area, and you can filter by specialty, compensation type, and certification. 
  • National Association of Personal Financial Advisors: With NAPFA’s search tool, you enter your ZIP code and can filter planners based on their distance from you. There’s also a map you can use to view all your options in one place.
  • Let’s Make a Plan: This is the Certified Financial Planner Board of Standards’ search tool. You can search by location, services offered, or both. All planners listed are CFP® professionals. 
  • XY Planning Network: XY’s tool lets you search for fee-only financial advisors (more on this below) in your area. You can look by location and filter results using various keywords and specialties.

Once you’ve shortlisted a few names, cross-check them on BrokerCheck.com and with the Securities and Exchange Commission. There, Steeno says, “You can see how long they’ve been in business or if they’ve had any disciplinary history.”

2. Review a financial planner’s credentials

There isn’t a single “financial planner” license or certification. As Steeno puts it, “Just about anyone can call themselves a financial planner.”

To ensure you’re choosing an experienced and knowledgeable professional, look for professional designations like CFP®, CFA, or CIMA. These are just a few credentials a financial planner can seek, each indicating a different specialty or skill set.

Here’s a look at some of the credentials you might see:

  • CFP®: A CFP® is a CERTIFIED FINANCIAL PLANNERTM. These professionals must have a bachelor’s degree, three years minimum in full-time financial planning, and complete a board-certification program. CFP®s also must take 30 hours of continuing education every two years.
  • CFA: CFA professionals must take a three-part exam focusing on investment tools, assets, wealth planning, and portfolio management to be certified.
  • CIMA: Professionals with a CIMA designation are Certified Investment Management Analysts. CIMAs are required to have three years of experience in financial services and enroll in a CIMA education course at the Yale School of Management, The Wharton School at the University of Pennsylvania, the University of Chicago Booth School of Business, or the Investment Management Research Program in Australia.
  • MRFC: An MRFC is a Master Registered Financial Consultant. These professionals need at least four years of full-time financial planning experience, have a bachelor’s degree in accounting, economics, or finance, and complete 40 hours of continuing education every year. 
  • ChFC: ChFCs are Chartered Financial Consultants. They must have at least three years of full-time business experience, complete 27 credit hours of courses, and receive 30 continuing education credits every two years.
  • CRC: This one is a Certified Retirement Counselor. They must have two years of professional retirement planning experience, pass a specialized certification exam, and take 15 hours of continuing education courses annually. 

You can usually find a planner’s credentials listed after their name — both in the online search resources under Step 1 and on their professional profile or LinkedIn account. 

3. Review fee structures 

There are many ways a financial planner may charge you, so be sure you understand how they charge before working with them. Some services are charged based on the assets or investments the planner manages, while others charge flat fees or receive commissions. How they charge can influence how much you’ll end up spending to work with a financial planner so it’s always important to research this part beforehand.

Here’s a look at some of the various fee structures financial planners use:

  • Fee-only: Fee-only planners are paid for the services they provide. This might mean an hourly rate, a flat fee, or a retainer of some sort. Fee-only planners do not receive commissions or kickbacks from the products and policies they recommend.
  • AUM: Assets Under Management is another fee-only approach. With this fee structure, you’ll pay a set percentage of the total assets your planner manages. 
  • Commission: Commissioned financial planners get compensated based on the products they sell to you. This can cause a conflict of interest, as it motivates them to recommend certain products, even if they’re not best suited to your needs.
  • Fee-based: A fee-based model is a combination of fee-only and commission structures. You may pay a fee for the planner’s service, and they also may receive a commission for certain products they recommend to you. 

Generally speaking, most professionals recommend seeking someone who is fee-only, as this ensures they have your best interests at heart. This includes AUM-based models, which motivate the planner to grow your assets (and avoid losses).

“It ensures the advisor’s interests are in line with yours,” Steeno says. “They want your assets to increase in value just as you do.”

Online financial planners vs. traditional planners 

You don’t have to meet with a financial planner in person to get professional help. Many financial planners offer online services that allow you to get the guidance you need without leaving your home. These usually include phone and video calls, in which you “meet” your planner virtually over Zoom, Skype, or another similar service.

These can be a good option if you want faster, more convenient service or to work with a planner not in your geographic area. 

There are also robo-advisors, which can be used for building and managing your investment portfolio. They’re typically more affordable than using a real-life advisor and have low starting balance requirements, but they’re also less comprehensive and personalized. Robo-advisors typically won’t help with budgeting, estate planning, tax planning, or other non-investment services.

As Rob Burnette, an MRFC and chief executive officer of Outlook Financial Center in Troy, Ohio, explains, “Robo-advisors are only useful for the investment part of a financial plan.”

In some cases, robo-advisors may include interactions with a live advisor (sometimes for an added fee). But it’s usually not a dedicated account professional, and you may be limited on how many times you can interact with them. This means less consistency and personal guidance than you’d get with a financial planner you hired directly.

“Robo-advisors generally offer a one-size-fits-most solution,” says Kris Maksimovich, a CRC and president at Global Wealth Advisors based in Lewisville, Texas. “They lack personalization and input and don’t offer hand-holding during periods of market volatility.”

The bottom line 

A financial planner can help you achieve your long-term goals but choose yours carefully. There are many types of financial planners, and their specialty, costs, credentials, and services should all play a role in your decision. 

Don’t be afraid to interview a few candidates. Set up introductory meetings with two or three professionals, and use the time to ask questions, understand their processes and fees, and make sure they’re a good fit before moving forward.

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