Selecting a Financial Planner

Is a financial planner right for you?

Financial planners look at your entire financial picture and advise you on how best to save, invest, and grow your money. A good financial planner will take the time to understand your financial goals, and help you develop a realistic plan to reach them. Over time, they can help you stay disciplined about your financial strategies – either managing your money for you or providing advice and guidance when you need it.

Typically, financial planners earn their living by charging hourly or flat rates for their services (typically referred to as “fee only”) or from commissions. Commissions are fees paid whenever someone buys or sells a stock or other investment. Some charge a percentage, for example 1%, of assets under management. Some people believe that paying a flat rate makes the financial planner more unbiased.

Tips to find the right financial planner

  • It’s best to work with a certified financial planner (CFP), but this is just a start. Research the person by asking friends, searching on the Internet, and asking a lot of questions. Verify they have current CFP credentials at www.cfp.net. Require references from current clients whose goals and finances match yours.
  • For more leads, check the National Association of Personal Financial Advisors (NAPFA). These planners are fee-only, which means their only revenue comes from their clients.
  • Consider the planner’s fee structure. You may want to avoid commission-based advisers.
  • Look for a fiduciary. In short, this means the planner has pledged to act in a client’s best interests at all times. Investment professionals who aren’t fiduciaries are often held to a lesser standard, the so-called sustainability standard. That means that anything they sell you merely has to be suitable for you, not necessarily ideal or in your best interest. This point is critical and should be a deal breaker if a prospective planner is not a fiduciary.
  • Beware of market-beating brags. If you have an initial meeting with an adviser, and you hear predictions of market-beating performance, get up and walk away. No one can safely make such guarantees, and anyone who is trying to may be taking risks that you don’t want to take. In addition, you want an advisor who will work with you to reach your goals, not theirs.

 

Tips & Resources - Selecting a Financial Advisor

 

This material is for informational purposes only and is not intended as investment, tax, financial, legal or other advice. Your personal decisions should be based on the recommendations of your own professional advisors. 

Unless otherwise noted, websites referenced herein that are outside the www.cpg.org domain are not associated with The Church Pension Fund and its affiliates (collectively, the Church Pension Group) and the Church Pension Group is not responsible for the content of any such websites.

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