Before you hire a financial planner, you should conduct an interview and ask a lot of questions so you can determine whether he or she will be able to handle your accounts effectively. It is important to ask about the type and amount of experience possessed by any prospective financial planner. You will want to know how many years they have been active in the industry. It will also be necessary to learn which firms for which they have worked. You may wish to have the prospective planner articulate some of his or her previous experiences in the field, and what types of things they learned and how they will apply that knowledge to new clients. Should you be seeking a planner who will provide investment guidance, you may wish to find a professional who has experience in navigating clients through economic downturns.
The term “financial planner” means different things to different people and it is essential that you get clarification as to exactly what qualifications the candidate has. For example, you can determine whether they hold such titles as Certified Financial Planner or Chartered Financial Analyst. Holding these titles is indicative of having completed comprehensive examinations and illustrate a dedication to the profession. You should also establish what plans the candidate has for professional advancement course to stay abreast of changes in the field of financial planning.
Services the candidate is offering.
Proper licensing and credentials are required for many services. Lacking proper licenses, financial planners may not offer insurance or securities products such as mutual funds or stocks nor offer investment advice without registrations with state or federal authorities. Some planners are only eligible to give advice in particular areas such as tax matters or financial planning, while others are not licensed to sell financial products but can offer financial planning advice on a broad range of issues.
Does the planner has close ties to promoters of financial products?
Such promoters encompass stock brokerages, insurance carriers and financial institutions. You need to know the kinds of clients and circumstances any potential adviser typically prefers. It is useful to learn whether they adopt a unified approach, crafting a comprehensive plan aimed at achieving a wide range of client objectives, or whether they are narrower in their expertise. A critical element when it comes to determining whether you have found a good fit is whether you and the planner have a shared investment philosophy.
Inquire the fee structure for the planner’s services.
Actual cost will likely be determined by the goals and desires of the client, though any reputable financial planner ought to be capable of offering a rough guess regarding probable pricing. Information necessary to conduct a thorough analysis of any fee structure includes the professional’s hourly rate, flat fees charged for particular types of services, and commission structures for any product purchases made as a result of professional advice received.
Licensing and credentials.
It is not uncommon for financial planning professionals to render opinions and advice on securities products even though they do not possess the proper licensing to do so. Certain states may have no licensing requirements for such work, but in all cases, it is important to know if a financial planner possesses all relevant credentials for the work he or she undertakes. Licensing involves rigorous exams and continuing education requirements which must be met to maintain the appropriate credentials. It’s important to be cautious and aware of the fact that licensed planners may be nothing more than salespeople wearing the disguise of planner or adviser.