5 Key Tips for Hiring a Financial Planner 1

Melissa is a mother of 2, lives in Utah, and writes for a multitude of sites. She is currently the EIC of HarcourtHealth.com and writes about health, wellness, and business topics.

Isn’t hiring a financial planner reserved for the rich?

Well, that’s one of the common misconceptions that cause most people to make poor financial decisions. Financial planning services aren’t a privilege to be enjoyed by the wealthy. They’re a necessity to everyone who wants to plan for their financial future.

Financial planners or financial advisors are experts with immense financial knowledge, skill, and experience. Their work is to advise you on how to manage your finances and help you plan on how to achieve your financial goals. It’s crucial that you hire the right person for the job, or else you’ll receive erroneous advice.

Here are crucial tips for hiring a financial planner that you should follow:

1. Start By Evaluating Their Qualifications

If you want to achieve ultimate financial success, don’t make the mistake of consulting an unqualified financial planner. The wrong advice could cause you to make very costly financial decisions.

Start by asking your prospective advisor about their academic qualifications, certifications, and licenses. Make sure they’re licensed to operate in your state. Many certifications can prove a financial advisor is a professional, but the most common ones to look out for include the CFA (Certified Financial Planner) and ChFC (Certified Financial Consultant).

2. Find out Their Experience

Experience may play a significant role in the type of advice that a financial planner gives you. An advisor who has been in the industry for long has probably come across a situation similar to yours. They’re more likely to provide you with useful suggestions that they have proven successful in the past.

A newbie financial advisor will be experimenting with your case. But, expertise also matters. Experience alone is not enough to carry the day.

As the financial planner how long they have been in operation; what companies they have worked for; what clients they have served; some of their achievements, and so on.

3. Determine If the Financial Planner Will Put Your Interests First

A financial advisor can follow a suitability standard or fiduciary standard of care. A planner who follows a suitability standard will give you advice that may be just suitable for you but not necessarily the best.

A planner who follows a fiduciary standard is required to act in your best interest at any given time. They are registered as a Registered Investment Advisor (RIA) and held to the fiduciary standard. Go for such a planner if you want objective advice.

4. Ask How the Financial Planner Charges For Service

Different advisors charge differently for their services. But, they typically use the following bases: hourly rate, commission-based, flat/fixed rate, or fee-based.

A planner that earns based on a commission has more incentive to guide you in the right financial direction.

5. Do Some Background Check on the Financial Advisor

Before entrusting your financial future in the hands of a stranger, do a background check on them. Find out how the advisor relates with their clients. It’s vital that you get a planner with whom you can have a healthy relationship.

Find a financial advisor that you’re comfortable associating with. Hire a person that can answer all your questions and give you objective counsel.

Tips for Hiring a Financial Planner!

These are the main tips for hiring a financial planner. Take them into account, and you’ll find a reliable advisor to help you achieve your financial goals!

Read on to find more exciting and informative financial topics!