99% of families don’t have a financial planner, but most of them need one. Since you’re reading this article, we’re assuming that you’re looking at hiring a financial adviser for yourself or your family.
If you’re looking at hiring a certified financial planner that will be worth your money, you need to understand how to choose the best financial adviser. To get our tips and tricks for choosing the right financial adviser, keep reading. We have all of the criteria that you need to have when choosing a certified financial planner.
1. Find a Certified Financial Planner Who Meets Fiduciary Standard
Everyone wants a certified financial planner who makes choices based on what’s best for their client. Whether or not it hurts them, your financial planner should be looking out for you.
Usually, certified financial planners work to a suitability standard rather than a fiduciary standard. Unfortunately, suitability standards aren’t actually “suitable.”
Suitability standard refers to the action of making ‘suitable’ choices. This doesn’t mean that the choices are necessarily the best. In fact, they may be less than the best for you.
Fudiciary standard refers to the action of making the best choices. This means that your certified financial planner is always looking to make the best decisions for their clients, regardless of how those decisions affect the financial planner themselves.
For example, your financial planner may find that their company isn’t the best to help you meet your financial needs. A financial planner who follows a fiduciary standard would set you up with another financial planner with their company or send you to another company without worrying about it.
We recommend that you get the fudiciary standard in writing. Ask the financial planning company that you’re working with to give you a letter that proves that you’ll receive this standard of care. If they refuse, you may want to take your business elsewhere.
2. Find a Certified Financial Planner With Transparent Fees
One of the worst parts of outsourcing a job is the fees. There may be an initial payment that the expert gives you, but this is rarely the final payment that you’ll end up having.
Especially in finance, there are always additional fees that seem to come out of nowhere. You need to make sure that you understand all of the fees that could potentially be added to your bill if you decide to hire a financial planner.
Again, we recommend that you get this kind of thing in writing. Having a written document that is signed by your financial planner will ensure that you won’t be feed to death.
Keep these fees and other payments in mind as you’re working with your financial advisor. You want to maximize your money and make sure that you’re getting the best financial advice that your money can buy.
If the financial planner that you’re considering won’t give you a full breakdown of potential fees that you may incur, you shouldn’t work with them. They may be hiding ridiculous costs that are meant to trick you.
3. Find a Certified Financial Planner Who Explains Jargon Well
The point of hiring a certified financial planner is so that they can help you get your finances under control. To do this, they need to be able to help you get through difficult financial decisions. This includes confusing jargon, difficult rules, and impossible policies.
Your chosen financial planner should be able to navigate you through all things financial without having any issues. This means that they have to be able to break everything down for you.
If you end up working with a financial advisor who can’t accurately and simply explain complicated concepts to you, you won’t know what’s happening with your money. The financial planner could be asking to place it into a risky investment account, and you wouldn’t understand it.
Sometimes, financial planners will offer free consultations. Use this time to get to know how well that particular financial planner explains concepts and ideas.
Ask several questions and see how well you can understand their thought process. Pick their brains now, rather than finding out that their vocabulary is out of reach.
4. Find a Certified Financial Planner Who Offers Free Events
Free events aren’t a must-have when you’re thinking about partnering with different financial offices. However, educational events are extremely important to the modern-day individual. If those events are free, that’s just a bonus for you.
Many financial offices offer free educational events that cover topics like retirement, investing, real-estate, and college funds. These are great for the company, because they bring in potential customers. However, they’re also great for people with financial questions like you.
If the company that you end up working with does have these events, you should take advantage of them as much as possible. This is especially if they’re free.
You never know what you could learn about different financial topics.
5. Find a Certified Financial Planner Who Actually Cares
You need a financial planner who’s actually going to care about your financial situation. This means that you need to stay away from financial planners who try to push products and sales on you.
You need to avoid the risks of mixing solicitation and financial advice. It’s likely that you’ll be taken advantage of if you work with a financial planner who has secondary intentions. Make sure to protect yourself.
In fact, we recommend that you bring up this point before you start working with the certified financial planner that you’re considering. Ask them if they get a commission or are required to sell items. If you’re feeling bold, tell them that you won’t work with them if they’re going to push products and services on you.
We just wouldn’t want you to make yourself a target, so you need to be careful.
Regardless of solicitation, you should hire a certified financial planner who genuinely cares about your financial health. A good financial planner will help you with your finances, but a great one will teach you about your finances.
6. Find a Certified Financial Planner With Experience
Depending on your own personal knowledge, you may need a certified financial planner with a lot of experience. You may not want someone who’s fresh out of college or just completing an internship.
Someone with experience already know how to care for their customers, explain concept clearly, and get their customers on the route to financial freedom.
If you’re wondering about your potential financial planner, you can usually look up their experience online. However, if you can’t find anything good online, any great certified financial planner should be happy to tell you about their finance experience.
You can also ask if the certified financial planner that you’re talking to has a certain specialty or several specialties. Sometimes, certified financial planners will hone in on certain skills and become a specialist in that topic. For example, a certified financial planner may be a specialist in retirement planning.
Depending on the stage of life you’re in, a specialist may be more suited to help you with your finances.
7. Find a Certified Financial Planner Who Offers the Right Services
Before signing with a particular financial planner, you should check out what kinds of services they offer. There’s no point in hiring a certified financial planner to help with your taxes if they don’t provide tax organization as a service.
You can usually ask for a full list of services and the company’s fees for those services up front.
You may find that several financial planning offices have different levels of services. These services may come in packages that give a range of what the certified financial planner will do for you depending on the price of the package.
As you’re choosing packages, don’t immediately go for the most expensive one. Make sure to weigh your options and the pricing of those options. We recommend that you start with the basic package and build your way up to make sure that you aren’t dumping all of your money into a financial advisor that you may end up not liking.
8. Find a Certified Financial Planner Who Gives Clear Analytics
A great financial planner will work to give you the most clear and concise analytics possible. With this, they will make your analytics and performance easy to view and easy to read.
If you can’t figure out how to better yourself and your financial situation, what’s the point of hiring a certified financial planner?
You need to use the advice and performance reporting that your financial advisor should give you in order to better your financial problem-solving methods in the future. Without having these numbers, statistics, and reports, you can’t better yourself.
So, we suggest that you ask your potential certified financial planner what their system for tracking your performance is. They may use an app or a spreadsheet. They may even give you worksheets to take home.
Whatever their system, make sure it works for you and what your future financial goals are.
9. Find a Certified Financial Planner Who Answers Your Questions
Whether you’re wondering about a specific financial situation or an investment opportunity, you need to be sure that your certified financial planner will actually answer your questions.
You don’t want to be left in the dark when it’s time for retirement or begging for help when your kid goes to college. Find someone who will be upfront about your financial situation and the steps that you need to take to get where you want to go.
Finding an open and honest certified financial planner will help you in the long run.
This is another quality we suggest that you look for from the get go. If you have the opportunity to meet with your financial advisor before signing up for a package, you should ask them about how they approach specific scenarios and life events. Make sure that they don’t have an issue with weighing in on scenarios so that you can know whether or not they can be your go-to for answers.
Sometimes, financial planners have issues with answering questions based on life scenarios. This is due to legal reasons, personal reasons, conflicts of interest, and other issues.
We argue that you should be able to know how to approach situations in your life without having your financial advisor tell you that they can’t help you. If they can’t help you, you shouldn’t be paying them.
10. Find a Certified Financial Planner Who Will Carry You Into the Future
If you’re taking the time to hire the best certified financial planner for your family, you need to make sure that they’re going to be invested in your family for the long haul. Having them around for a couple of months isn’t ideal for most families who are looking for long-term financial guidance.
When you’re looking for your certified financial planner, you should make sure to ask how they feel about working with your family long term. Ask whether or not they can sustain a long-term customer and if they have the knowledge necessary to help your family transition between large life events.
Finding a certified financial planner who can stick with your family is better for everyone involved. Over time, that financial advisor will come to know your family and its financial habits well, meaning that they will be able to help you more than a random, new financial advisor would.
Learning More About Financial Planning
Now that you know how to choose a certified financial planner that will actually be worth your money, you need to go meet with potential choices. Venture around to different companies and see what the best fit for you and your family would be.
Make sure to keep all of the criteria that we shared with you in mind as you’re meeting with these companies and planners. Also, don’t feel rushed to make a decision. Take your time and choose the best individual.
To learn more about financial planning and similar topics, feel free to look at the rest of our blog.