How to Choose a Family Financial Planner
By Amanda of mandajuice and The Naked Ledger.
If anything, the recent downward spiral of the economy has taught us that financial planning might not be something we should endeavor to undertake alone. It might be a good idea to hire a professional! Here’s how to find the right financial planner for your family.
1. Make a quick list of your needs.
Do you want to talk about retirement planning? What to do with your 401(k) now that it’s practically disappeared? Do you need help deciding about a major purchase (like a house)? Are you concerned that you aren’t saving enough for your kids? Are you worried your family isn’t adequately insured? Are you having cash flow issues? Or is it something significantly more complicated – like figuring out how to exercise your stock options or settle your grandmother’s estate? Make a list of the top five things you want to talk about. This will help you better focus on choosing a planner who specializes in exactly what your family needs.
2. Hit the Web.
Make only one stop and Go here: http://www.napfa.org/
The National Association of Personal Financial Advisors (NAPFA) is a nationwide non-profit organization made up of fee-only financial planners. If you’re smart about money, then what you’re looking for a planner who is not only qualified, but whose interests line up DIRECTLY with yours. The only way that can happen is if you pick someone who isn’t selling any product other than their advice. NAPFA planners are all 100% fee-for-service ONLY. They never charge commissions.
Read around a bit (nothing but good info there!) then click on “Consumer Information” and then “Find an Advisor.” You have to fill out a little bit of info about yourself, but DO NOT HESITATE. You can either chose to have local advisors who meet your search criteria contact you or they will give you a list and you can contact them. Either way, this is THE WAY to pick a planner.
3. Don’t ever pick a friend or family member.
This is a hard one because trusting your financial planner is the first step and it’s easier to trust someone you already know and love. But you should never choose anyone you couldn’t fire immediately without personal repercussions. When it comes to your money, the quality of the advice is directly proportional to the objectivity of the planner and a friend or family member is never going to be 100% objective because they already know you. You want a fresh OUTSIDE perspective.
4. Interview more than one planner.
Like almost everything in life, there is a HUGE variety out there. I loved my last job because we did more than just plan FINANCES, we did a lot of LIFE planning. We pushed a lot of clients out of their comfort zones and made them talk about what was REALLY important to them. Not all planners do that and not all clients want to get that personal with their advisors. Some planners are attracted to the field because they love numbers (these are the planners who work best with engineers and scientists). Some planners are attracted to the field because they like the personal interaction and relationship building. But you won’t know what kind of planner you prefer until you meet a few. These meet and greet appointments are ALWAYS free.
5. Sign an agreement and get started
Almost every financial planner I’ve known has come up with an agreement form that all parties must sign. Read this CAREFULLY. It’s almost like a marital pre-nup. It will lay out the responsibilities not only of the professional you’re hiring, but YOUR OWN. Make sure you’re willing and able (and enthusiastic) about keeping up your end of the bargain, whether this be in the form of providing all the data the planner needs or agreeing to a certain number of meetings.
After selecting your planner, go forth and prosper! In all my years of being a professional financial advisor, I can’t think of a single client who didn’t SAVE MONEY in the long run by paying for financial planning services. And I’m not talking about the price of peace of mind; I’m talking about cold hard cash saved by making better, more informed financial planning decisions.Published March 25, 2009. Last updated June 28, 2018.