Q: What does it mean to choose a financial professional?

A: Choosing a financial professional means finding someone you can trust with your financial future. Although you may handle many of your financial affairs yourself, occasionally you may need the services of a financial professional. Selecting the right person means evaluating the services they offer, their credentials, and finding someone whom you can rely on to give you good advice and/or service when you don’t have the time or expertise.

Q:What is a financial professional?

A: I have the tendency to use this phrase frequently, but let me take a moment to break it down.

A financial professional is anyone who handles your money for you as their job. Financial professionals include financial planners, attorneys, securities brokers, bankers and other specialists. Sometimes there is overlap, where one  person can do the job of many.  Or, some are highly specialized and will be called upon to work together.

Q:What does a financial planner actually do?

A: A financial planner is a professional advisor who can help you set financial goals. Most of the time, they are the quarterback.   They can write and implement an objective and comprehensive plan to manage all aspects of your financial picture. That typically includes; investing, retirement planning, estate planning, and protection planning.

A financial planner can give you information and advice on a wide range of other topics as well. These topics are too numerous to mention but include managing your cash, obtaining credit, buying a home, and paying for a college education. If the planner doesn’t have the specialized knowledge required to handle certain areas, such as tax planning or estate laws, they can coordinate a team of experts for you.

***I am regularly connecting lawyers, CPAs and mortgage brokers to my clients.

Although they can help you with a single issue, a financial planner, unlike other financial advisors, looks at your finances as an interrelated whole and helps you plan accordingly.

 

Q: What are some credentials to look for?

A: When choosing a financial planner, you should be aware that some financial professionals who use this title are not actually qualified to give comprehensive financial planning advice. They may be trained in only one area, or they may be primarily salespeople marketing themselves as planners. Stock brokers and insurance agents are notorious at this.   Although some states heavily regulate planners, others do not. Because anyone can call himself or herself a financial planner without being educated or licensed in the area, you should choose a financial planner carefully. Make sure you understand what services the person will provide you and what their qualifications are. In general, a financial planner will have one or more of the following credentials; CFP,CHFC,PFS,RFC.  (keep reading to learn what these letters mean)

 

Q: What do all those fancy letter next to a financial professional’s name actually stand for?

A: These mystery letters actually explain what the credentials are for your financial professional. A few more frequent ones you may encounter are:

• CERTIFIED FINANCIAL PLANNER™ professional (CFP®)

  -CFP® professionals must have a college undergraduate degree, have three years of related professional experience (or two years of apprenticeship experience that meets additional requirements), and have completed a course of study registered with and approved by the Certified Financial Planner Board of Standards, Inc. (CFP Board). They must pass a comprehensive exam that covers all aspects of financial planning. In addition, they must adhere to a professional code of ethics and fulfill 30 hours of continuing education every two years. Many also belong to the Financial Planning Association, a professional organization. If a planner says that he or she is a CFP® licensee, ask to see the planner’s CFP Board license or visit the CFP Board’s website, www.letsmakeaplan.org, to verify credentials.

• Chartered Financial Consultant® (ChFC®) and Chartered Life Underwriter® (CLU®)-

  -To receive either designation, planners must have at least three years of experience and complete a course of study through the American College in Bryn Mawr, Pennsylvania. Certification is rigorous and prestigious, and planners earning these designations must adhere to certain ethical standards.

• Accredited Personal Financial Specialist (PFS)–

  -The PFS designation is granted to CPAs who are members of the American Institute of Certified Public Accountants, and who earn a minimum of 75 hours of personal financial planning education, successfully pass a PFP-related exam, and have at least two years of full-time business or teaching experience.

• Registered Financial Consultant (RFC®)

  -This designation is awarded by the International Association of Registered Financial Consultants (IARFC) to advisors who have a college or graduate degree in financial services, or who have earned an IARFC-approved designation or professional degree. The RFC® also must have a minimum of four years experience as a full-time practitioner or educator in the field of financial planning or financial services. He or she must also meet licensing requirements, and they must complete continuing education courses, and adhere to a code of ethics.

Q: What should I avoid when choosing a financial professional?

A: Typically, the best answer is to trust your instincts. I recommend doing your research on the individual (google is a great tool for this).

A few things that you should be aware of and cautious about are- (Dig a little deeper on these guys)

• Commission only.  These people are typically product pushers that use fear tactics to get you to buy from them. Oh and they rarely ask about your goals.
• Inexperienced. This includes people who recently changed careers, aren’t certified, are purposefully confusing and/or can’t provide multiple references.
• Old Timers Who are Set in their Ways.  These people believe they have learned everything there is to know about financial planning. They don’t want to learn new strategies and will stick to old Zig Ziglar kind of tricks.
• Firm Jumpers- These are individuals who have multiple infractions on record. They jump from firm to firm usually looking for a quick pay day.

As always, you can consult with me to discuss  the most appropriate financial professional for you.

Look for future posts on investing   and check out my recent post on the importance of life insurance.  

Thanks for stopping by and I hope you achieve financial success!