5 Steps to Finding the Right Financial Planner
Numerous studies have shown that working with a professional financial planner will put you in a much better retirement position and help you reach your financial goals earlier. But how do you know who to trust and what is the best way to find the professional planner that is right for you?
While finding the right professional might seem like a daunting task, the best way to begin your search is to follow 5 simple steps:
1) Do Your Research! – Before making any decisions, or even comparing different planners, you need to do your own research and find out what you should be looking for and what questions to ask. There is a wealth of information available on www.financialplanningforcanadians.ca to help you with this. Take a look at the checklists on that site to see what you should be looking for and check out the “10 Questions to Ask Your Financial Planner” video for some tips on what questions you should be asking.
2) Create a List – Before evaluating various planning professionals and seeing what services they offer, create a list of what services you would like to see and what type of relationship you want to have. Having a good understanding of what you want will help guide you as your search for the right ally to work with. You don’t have to have all of your needs and long-term goals clarified before you begin a search as the right professional will help guide you through the goal-setting process while building your plan.
3) Confirm What Type of Professional You Need – Are you looking for someone to simply invest money for you or sell you a life insurance policy? If so, a licensed insurance agent or investment advisor may be all that you require. But if you are looking for “big picture” planning work for your entire financial well-being, seek out someone who has a Certified Financial Planner (CFP(r)) designation, the international “gold standard” of the financial planning profession.
4) Be Wary of Referrals – This advice might seem like I’m shooting myself in the foot since the majority of our new clients come from referrals, but I’ve heard many people offer the name of the guy or girl they’ve been working with for years since they seem to do a good job but the person making this referral may have no idea of what they should expect from a professional planner and have no idea if the person they work with is actually any good. You should definitely ask people you trust if they know someone they would recommend but you should follow up any recommendation with more questions about why the referrer feels that they are good and how they stack up against the questions you’ve compiled.
5) Ask Questions – When it comes time to interview potential financial planners, be sure to ask a lot of questions and don’t feel rushed to make a decision. Any good professional will be more than happy to answer questions over multiple meetings and should encourage you to interview more than one potential advisor before you make any decisions. They should be forthcoming with information about the fees that they charge, their succession plans and what a client could expect from a potential relationship.
At the end of the day, selecting the right planner to work with will come down to comfort and “gut feel” to some degree but you can come much better prepared to make this decision by arming yourself with more information. Your choice of a financial planner is an important decision that will affect virtually all aspects of your financial well-being and as such, should not be taken lightly.