First, is the advisor experienced? When meeting with the advisor for the first time, you will want to ask how long they have been in business, the types of clients they typically handle, and the breadth of experience they possess. Although your issues may not seem overly complex, you may not be fully aware of all the strategies available to employ. Challenges facing seniors can be especially tricky, make sure you are not the advisor's guinea pig. Many novices present public seminars with only have a very basic knowledge of tax and estate planning issues.
Second, what is your advisors educational background? You'll want to look for genuine credentials such as Chartered Financial Consultant, Certified Financial Planner, Certified Public Accountant, Certified Life Underwriter, Juris Doctor, or other legitimate credentials. These indicate an educational background in finance, business, insurance, law, accounting, etc. and require years of experience and/or comprehensive examinations from accredited institutions. Beware of quickie course designations such as the CSA, which only require a two-day course and minimal knowledge of planning topics.
Third, has the advisor shown a true commitment to ethical behavior? The advisor should hold a membership in a least one financial industry association that requires a code of ethics. Such associates as NAIFA, Society of Financial Service Professionals, IBCFP, FPA, etc enforce ethical behavior. You should also beware of advisors that use their affiliation with trusted organizations as the sole basis for their ethical behavior (churches, community centers, etc.)
Fourth, is there a commitment to continuing education? Complex laws are ever-changing and the economy never holds still. How many hours are spent each year keeping skills sharp? Are the continuing education hours at a beginning, intermediate, or advanced level?
Fifth, what services do you need? Comprehensive retirement, tax strategies and estate planning? Solely tax advice? An investment advisor? Real estate advice? Or, is he just an insurance salesman? Identify an advisor that emphasizes the services you need.
Sixth, what is your advisor's support structure? Is he a solo-practitioner, or is he part of team of specialists that can strategize on the various issues? Is the firm large enough to have the resources to provide the services that you require?
Seventh, what is their clientele like? You want to find a financial planner that handles similar clients to yourself. If you have a net worth of $200,000, but your advisor primarily handles people with a net worth of $5 million and up, are you going to receive the attention that you deserve? Are there other advisors with the firm that may be better suited to your situation? Does the advisor have a particular age demographic, or preferred client type?
Eighth, how is the advisor compensated? Is he/she paid by fees only, commissions, or both? More about planner compensation in an upcoming article.
Finally, is your advisor a professional? Be wary of persons who are merely part-timers working out of the trunk of their car, lack membership in professional societies, omit commitment to continuing professional education, and criticize others who do commit to high standards. Often they will downplay the need for education, or boast they "know more about estate planning than most attorney's out there." Smooth salespeople are often very charming, and may even present a charismatic public seminar-but they may also be dangerous because they don't know what they don't know.
Second, what is your advisors educational background? You'll want to look for genuine credentials such as Chartered Financial Consultant, Certified Financial Planner, Certified Public Accountant, Certified Life Underwriter, Juris Doctor, or other legitimate credentials. These indicate an educational background in finance, business, insurance, law, accounting, etc. and require years of experience and/or comprehensive examinations from accredited institutions. Beware of quickie course designations such as the CSA, which only require a two-day course and minimal knowledge of planning topics.
Third, has the advisor shown a true commitment to ethical behavior? The advisor should hold a membership in a least one financial industry association that requires a code of ethics. Such associates as NAIFA, Society of Financial Service Professionals, IBCFP, FPA, etc enforce ethical behavior. You should also beware of advisors that use their affiliation with trusted organizations as the sole basis for their ethical behavior (churches, community centers, etc.)
Fourth, is there a commitment to continuing education? Complex laws are ever-changing and the economy never holds still. How many hours are spent each year keeping skills sharp? Are the continuing education hours at a beginning, intermediate, or advanced level?
Fifth, what services do you need? Comprehensive retirement, tax strategies and estate planning? Solely tax advice? An investment advisor? Real estate advice? Or, is he just an insurance salesman? Identify an advisor that emphasizes the services you need.
Sixth, what is your advisor's support structure? Is he a solo-practitioner, or is he part of team of specialists that can strategize on the various issues? Is the firm large enough to have the resources to provide the services that you require?
Seventh, what is their clientele like? You want to find a financial planner that handles similar clients to yourself. If you have a net worth of $200,000, but your advisor primarily handles people with a net worth of $5 million and up, are you going to receive the attention that you deserve? Are there other advisors with the firm that may be better suited to your situation? Does the advisor have a particular age demographic, or preferred client type?
Eighth, how is the advisor compensated? Is he/she paid by fees only, commissions, or both? More about planner compensation in an upcoming article.
Finally, is your advisor a professional? Be wary of persons who are merely part-timers working out of the trunk of their car, lack membership in professional societies, omit commitment to continuing professional education, and criticize others who do commit to high standards. Often they will downplay the need for education, or boast they "know more about estate planning than most attorney's out there." Smooth salespeople are often very charming, and may even present a charismatic public seminar-but they may also be dangerous because they don't know what they don't know.
About the Author:
Hank Brock is president of Brock and Associates, LLC, a firm specializing in retirement, estate, tax, and business planning. Be sure to check out Hank's article on selecting a financial advisor for more extensive information.
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