Finding A Financial Planner

Someone who is unfamiliar with the complexities of retirement planning may find it difficult to develop a financial plan on their own. So, if you’re not working with a planner already, how do you find one?

First of all, I recommend seeking out a Certified Financial Planner. A planner who has earned that designation will put those initials after their name. It represents a level of training that has become the gold standard for the financial services industry today.

A “broker” is typically held to what’s called a suitability standard. That means they are required by regulation to recommend only investments that are suitable for you in terms of your goals, risk tolerance, time horizon, and so on.

The higher standard that CFP® professionals must meet is called the fiduciary standard. It carries all of the requirements of the suitability standard and goes a step further by saying that they must also act in the client’s best interest. They must put the client’s interests first. With a suitability standard, for example, someone could recommend a high- commission product to you as long as it’s “suitable.” But is a high-commission product really in your best interest?

With all the alternatives in today’s environment, the answer is probably not. Fiduciaries have a responsibility to be diligent about keeping client fees low. To be fair, you can also find investment advisors who serve as a fiduciary and do not hold the CFP designation. These are still legitimate advisors. However, I strongly prefer advisors who are held to the fiduciary standard.

The second difference is expertise that extends beyond the client’s portfolio. When someone goes through the CFP process, they gain aptitude in six areas: insurance, tax planning, investments, retirement planning, ethics, and estate planning. It’s a holistic designation. When you talk with a CFP, you’re talking with someone who can provide tools and resources in areas outside of your portfolio. Can brokers also provide value in those other areas? Yes, absolutely. Just know there is no standardized process for their gaining expertise in those areas.

So, how do you find a CFP? If you are looking to find an advisor locally, I would recommend the National Association of Personal Financial Advisors (NAPFA). You can Google it, or simply go to www.napfa.org. This is a large, nationwide network of advisors who are willing to create one-time financial plans for a fee (among other services as well) and have taken a fiduciary oath. You can begin by using the “Find an Advisor” tool on the home page.

Remember, a financial plan answers the foundational question of retirement: How can I meet my financial goals in a way that works for me?