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Finding A Financial Planner

Chris Farrell Dec 21, 2007

Question: Help! How do I find a good financial planner? Someone who I can sit down with and show my entire portfolio, with stocks, IRAS, and real estate investments and who will understand all of it and help me crunch all the numbers so I can clearly see my different options to get out of the mess I got myself into?! Samantha, Venice, California

Answer: This may be unfair, but my first question is do you really need a financial planner? My overall bias is that for most people the answer is no–at least not until you can do most of your financial planning on your own. Here’s why: One of the biggest money mistakes people make is to simply turning their money over to a professional and assume they’ll do all the work. That’s a recipe for trouble and disappointment.

Still, some of us truly need to talk to a real person rather than interact with a computer screen. In your case, talking to a knowledgeable person will help you make sense of your options going forward. There are other reasons why it can pay to work with a professional. A number of people find that their finances are too complicated to deal with on their own. Another good reason is time. Our lives are hectic, the law is constantly changing, and we’d like to work with someone we trust. And for many of us, tapping into the expertise of a planner makes sense when we are facing a major life transition, such as retirement.

There are several ways to find a financial planner. The best method is networking. Talk to neighbors and colleagues that use a financial planner and get their recommendations. You can also go to the website of the National Association of Personal Financial Advisors at www.napfa.org. Another resource is the Financial Planning Association at www.fpanet.org.

I’m definitely biased toward fee-only planners with a Certified Financial Planner (CFP) designation. That gives you confidence that they’re professionals well-versed in the basics of the business. They also invest in continuing education. In addition, with a fee-only planner you get objective advice unsullied by commissions.

Once you have found several potential fee-only CFP candidates, carefully check out their references and learn whether they deal with people in your income bracket. Assuming that most check out and that they are all ethical, how do you choose? At that point, the deciding factor is which financial planner you’re most comfortable with. After all, this is a person who is going to be working with you on the financial details of your life–the good and the bad.

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