There are at least a couple of broad classes of financial advisors. One group makes its money by selling you products. These include banks, brokers, insurance companies and the like. They may be less expensive, but may have a bias towards their products. Another group makes money by charging you a fee for advice. They have should have no vested interest or benefit no matter what products you decide to invest in. They may be more expensive but less biased.
There are also a couple of professional credentials that are an indication that the financial planner is well trained. Certified Financial Planners (CFP) focus on financial planning for individuals. They are usually well versed in a broad range of financial products. Chartered Financial Analysts (CFA) have passed a rigorous examination process and must have several years of experience. Some of them specialize in private wealth management.
If your advisor is going to be giving specific securities advice, they must also obtain various securities licenses. These may include the Series 6, 7, and 66 licenses awarded by the National Association of Securities Dealers.
There are web sites you can use to find financial planners with the credentials I mentioned above. If you wish to find a CFP use this site:
If you wish to find a CFA, use this site:
http://www.cfainstitute.org/
You can also ask for referrals from your friends or from the professionals you already work with such as your accountant, attorney, etc. You should interview several planners to find out if you like them, what their investing philosophy and style is, how they make their money and if they have the needed qualifications.
You can also ask for referrals from your friends or from the professionals you already work with such as your accountant, attorney, etc. You should interview several planners to find out if you like them, what their investing philosophy and style is, how they make their money and if they have the needed qualifications.
Here are four sources for finding a good financial planner:
(1) International Association for Financial Planning. Call 1-404-395-1605 and ask for the Registry Department. They will give you up to five names of qualified financial planners in your area. The IAFP is the USA's largest trade association for financial planners. The Registry consists of those who have passed special qualifying requirements, including a written exam.
(2) The Institute of Certified Financial Planners. It's a professional group that will give you the name and number of one to five planners in your area. Call 1-800-282-7526.
(3) National Association of Fee-Only Planners. Call 1-800-366-2732. You will get a list of planners in your area who charge a straight fee, rather than being paid by a combination of fees and commissions.
(4) American Society of CLU & ChFC. The professional organization for Chartered Life Underwriters and Chartered Financial Consultants, trained by the American College in Bryn Mawr, PA. Call 1-215-526-2500. They will give you the names of up to five planners in your zip code area.
Posted by: Bob Hansell | February 13, 2006 4:25 PM | Permalink to Comment