The decision to use a financial planner is an important one, and it will require you to do some research before you can make a good decision. The reason is that there are more than 330,000 people in the U.S. alone that call themselves financial advisors1 — it can get confusing real fast. So how can you narrow down your choices in a methodical and educated way and ultimately choose the right financial planner for you?
How to Find a Fee-Only Financial Planner:
Here are some tips that can be helpful when narrowing your list and selecting a financial planner that could work well with you:
Determine Comfort and Trust
Perhaps the most important questions to ask yourself is, “are you comfortable working with this person” and “do you trust this person”? If the answers are “not sure” or “no” to either of these, then do not settle. Take the time and keep looking for an advisor with whom you can definitively say “yes” to both questions.
Turn to Trusted Professionals Such as Attorneys and CPAs
Financial planning professionals may be able to assist you in a variety of areas such as estate planning, investments, retirement, taxes, and insurance. If you have a specific need — for example, estate planning — you may wish to choose an advisor that mainly specializes in estate planning.
Do You Want a Solo or a Team?
Like a doctor or lawyer, some financial planners will work independently, and others will work as part of a larger financial planning practice. A team approach can often provide more flexibility and areas of expertise in terms of growing with your financial needs over time without switching advisor practices. However, you may also want to become acquainted with more than one financial planner in a larger practice to gauge both the expertise and comfort you seek and to see if the firm is compatible with your needs.
Ask About Compensation Structure
Some financial advisors are paid by fees only and others can accept commissions. A “fee-only” financial planner does not have the same potential conflicts of interest that a “fee-based” financial planner may have because the former does not get paid via commissions from the product he or she sells to you.
Fiduciary Duty
Ask your financial planner if he or she is a fiduciary. Why is this important? Because fiduciaries have a legal obligation or “fiduciary duty” to act in your best interests. All planners who carry the Certified Financial Planner ® designation are fiduciaries.
Location Preference?
Yes, Zoom has made it much more convenient to meet with people remotely during the pandemic. Nevertheless, we recommend that you have a financial planner that you can meet with in person and is relatively close to home.
Gender Preference?
Just like your doctor, you may prefer to work with a financial planner who identifies as a male or female.
Get a Referral
You may know someone who already uses or knows a reputable financial planner, which can provide you with a warm lead. Either way, you should always get referrals from a financial planner as well and speak to those references about their experiences with the planner before you sign any agreement.
Use NAPFA or FPA
In addition to your own personal network, you can leverage a few online sources that gather and list fee-only financial planners.
- NAPFA.org (The National Association of Personal Financial Advisors)
According to their site, “The National Association of Personal Financial Advisors (NAPFA) is the country’s leading professional association of Fee-Only financial advisors—highly trained professionals who are committed to working in the best interests of those they serve.” To search the NAPFA database visit napfa.org
- FPA (The Financial Planning Association)
The FPA also has a database of financial planners that you can search according to location and compensation type. Not all planners are fee-only, but you can easily filter the database to highlight fee-only planners. To search the FPA database visit plannersearch.org
About Modera Financial Planners
We are proudly a fee-only, independently-owned financial planning firm that acts as a fiduciary for our clients. We have built our organization to put our customers’ interests first, as evidenced by our fee-only fee structure and fiduciary responsibility.
If you’re interested in our services, please contact us. If you would like to learn more about financial planning, wealth management, and finding a financial advisor, please visit other areas of our education section.
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