In today’s world with a lot of information floating around the internet about various professions, just about anyone can refer to themselves as a financial planner or a financial advisor without putting into consideration what they studied professionally or their professional experience. Additionally not each of them is unbiased in the advice they offer, and they don’t always act in their client’s best interest. So as to ascertain that your financial planner is a professional and he or she is well-qualified in personal finance, you should consider the factors below:
Possessing impressive credentials in financial planning such as Certified Financial Planner (CFP) or Personal Financial Specialist (PFS) gives you some assurance that the professional you have chosen to work with has the knowledge and experience to work as a financial planner. These credentials are given to those people that satisfactorily achieved the requirements of education and experience in handling personal finance matters. Additionally, they also have to excel in certification exams.
You should be aware of the fact that not every financial planner can handle all types of clients. Most of them specialize in serving only particular types of customers with specific profiles. For instance, a personal financial planner may develop his/her expertise and customize his/her services to offer services to those families and people who are in specific professions, or a certain stage of life with certain financial goals and wealth. Inquire if the planner serves only a specific type of clients so as to know if he or she is the appropriate financial planner for you.
Ensure you look into the fee structure of the financial planner. The fee structure plays a great role in determining whose interest the planner serves best. It is either his/ her own interests or the clients’ interests. You should know that a fee-only professional charges you fees only for the advice they offer you while a fee-based professional charges you fees plus he/she also pockets commissions, referral fees and other financial gains on the solutions and products they recommend for you.
It is important that you choose a financial planner who is often available for you. He/she should also be attentive and accessible to you too. Find out how many clients the planner currently serves and the maximum amount of clients he/she intends to serve in the near future. This clients-to-planner ratio helps you to determine the availability of the planner in the future. You should also ensure that the planner is accessible through the phone and email during typical business hours for communication purposes.