How to Choose a Financial Planner

by Stephany Kirkpatrick, CFP®
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Think you might need a financial planner, but not sure how to go about it? There are many types of planners out there, and several different considerations to make when you’re figuring out how to choose a financial planner that’s right for you. Here are a few basic questions you may want to ask when you’re beginning your search.

1. What type of help are you looking for?

Some financial planners will only work with individuals with high net worth. Often called “wealth managers,” these planners focus on providing investment advice. Their fees may be based on the size of your assets– for example, they may charge one or two percent of your assets under their management.

Other financial planners focus on estate planning, retirement savings, helping you create a budget, helping to assess your financial health, or recommending strategies for financial goals like buying a house or creating a college fund. The right financial planner for you may depend on the type of help you’re looking for.

2. Are they trustworthy?

Another question you may want to ask when choosing a financial planner is: are they trustworthy? Commission based (sometimes called “fee based”) financial planners are often agents or brokers who make a commission from selling financial products, like an insurance policy or mutual fund. Because of that, they may be incentivized to sell a specific product to their clients.

If you’re looking for a planner that only sells financial advice, you may want to look for a “fee based” financial planner. Many of these planners are registered investment advisors (RIAs), which means they have a fiduciary responsibility (another term to look out for) to act in their clients’ best interest. Other designations include CERTIFIED FINANCIAL PLANNERS (CFPs), and Certified Public Accountants (CPAs).

3. How much do financial planners cost?

Fee only financial planner rates vary. While some charge a percentage of their client’s assets, others may charge a flat fee, an annual retainer, or by the hour. Many fee only financial planners can often range from $1,000-$3,000 or more annually.

4. What exactly are you paying for when you work with a financial planner?

What’s included when you work with a financial planner can vary greatly. Some may offer an in-depth financial assessment to get a sense of your finances and goals. Most planners will create some sort of financial plan for you, but the length and complexity of the plans can vary– so you may want to consider asking for a sample plan if you’re considering a certain planner. With some planners, their services end with the delivery of a financial plan. Others may offer to be on call to answer questions or offer advice when you need it– these are planners that will generally charge hourly or have a retainer. The right arrangement for you may depend on how complex your finances are and how much you’re willing to pay.

5. Do you feel comfortable working with the planner?

The last major criteria to consider when choosing a financial planner is much more subjective: do you feel comfortable working with him or her? Money is personal. A successful relationship with a financial planner can require trust and effective communication. When you speak with a potential financial planner, you may want to ask yourself: do you feel like they relate to you? Do you have a good rapport? Do you feel like they understand your concerns? If the answer is no, you may want to keep looking. You’re under no obligation to stick with someone you don’t feel comfortable with (outside of any fees you’ve already agreed to pay, that is).

As a fee only financial planner at Learnvest.com, which is a Registered Investment Advisor, I’m able to offer my clients comprehensive, financial advice. I do provide investment advice for some clients, like helping them determine their risk tolerance and offering asset allocation recommendations, but for other clients, I focus on helping them build a budget that fits their lifestyle, pay off debt, get on track for retirement, and work toward other goals like buying a home or starting a family.

LearnVest programs include a custom financial assessment and a financial plan (see sample). But because we know that it can it can take ongoing guidance and accountability to actually put a plan into action, planners also act like personal trainers for your money. I’m available to my clients all year round to help them build lasting money habits and make progress over time. And I help provide them with articles, classes, and other resources so they can feel empowered and confident about their financial decisions.

LearnVest programs range from $89 to $399 for the initial program setup fee, with a monthly subscription of $19 a month. If you’re interested in working with a planner like me, you can schedule a free session with a LearnVest Program Expert to learn more.

LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc. that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. LearnVest Planning Services and any third parties listed in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies.

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