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How to choose a financial planning analyst who will help you reach your goals and dreams

The financial planning analyst whom you pick should be the very best for the future of you and your family -- that obvious, but, what should you look for in an analyst?

The CFP Board of Standards Inc. (the body which certifies financial planners in the USA) has published a brochure called Your rights as a client (opens new window) and based on this; we have prepared an outline of what things to look for:

a. You need a professional planner and/or advisor

The person who is going to advise you should be qualified and licensed to provide these services.  It is also important to realize that when your financial planning analyst lack experience in certain services (e.g. estate planning) he should suggest or refer other professionals who could assist you.

b. You need a planner and/or advisor who is competent

It is important that your advisor be able to demonstrate that he has sufficient knowledge to advise you in the field of financial planning, for example having been certified as a Certified Financial Planner and is constantly keeping up-to-date through attending courses and continuing education in the field.

c. You need a planner and/or advisor that offers objective advice

Your financial planning analyst should always be working with your best interests in mind.  For this reason, the evaluation of your situation and the recommendations which he provides should reflect this. Professionals who act as fiduciaries have an obligation to do this.

These days there are numerous so called "financial advisors" who are really salesmen of financial products. For this reason, distinguish between those who work for your benefit and those who don't.

In general, lawyers, CPAs and investment advisors are fiduciaries. Financial Planners might be, depending on how they are paid for their services.  On the other hand, insurance agents and stock brokers are not fiduciaries because they have an interest in selling you something.

As a general rule we can say that in order to presume that the advice you get is really objective and with your best interests in mind, your financial planning analyst should not receive or generate any benefit for third parties from any recommendations given to you and should receive only one remuneration for the advice which is given.

This is a key concept and overlooking this could be very costly.

d. You need a planner and/or advisor who treats you fairly and transparently

Your advisor should clearly inform you about the services which he provides and the cost of these.  He should also inform you of any conflict of interests which might exist and the risks associated with the recommendations which he gives you.

e. You need a planner and/or advisor with integrity

Given the importance of planning your finances, it is vital that there is enough confidence between you and your financial planning analyst for the relationship to be worthwhile.  For this your advisor should demonstrate his integrity and adhere to a strict code of ethics.

The best way to do this is to know the bodies which regulate the advisor's activities and contact them to verify their qualifications before hiring them.

f. You need a planner and/or advisor who is diligent

From the start your advisor should demonstrate that he has a genuine interest for you, for example:

  • Before accepting you as a client he should demonstrate an interest in your needs and objectives and inform you if he believes he is capable of meeting all or only part of your needs.
  • Also he should investigate and have extensive knowledge of the products and services which he recommends,
  • Supervise the support staff who will work with you.

g. You need a planner and/or advisor who offers you security concerning his services

It is important that your financial planning analyst provides a written contract covering all aspects of the services he provides and committing to respect your privacy.

h. You need some option where you can lodge a complaint concerning your planner or advisor, if necessary

If, for any reason, you need to register a complaint with your financial planner or financial planning analyst, it is advisable that you know beforehand what professional association the consultant is affiliated with.

For example a complaint about a Certified Financial Planner (CFP) could be made with the organization which controls certification in your country.  On the other hand, if you have another kind of advisor, (CPA, Stock Broker, etc.) normally you can complain to the bodies which license these professions.

Some links to sites related to bodies where you might register complaints follow:

Other sites in the USA:

Sites in Australia:

Sites in Canada:

It's true that there are a lot of details to consider, but it is necessary to know these because it's your future which is at stake and in this step you need to define what is important to consider.

But, where do you start and how do you evaluate the points we've raised?  To help you with this we've created the following tool:

toolWorksheet to Choose a Financial Planner. This has practical questions to help you rate your candidates as well as a ranking system to help you choose your advisor.

To use this tool you will need Microsoft Excel or the free alternative Open Office.

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