9 Steps to Evaluate a Financial Planner

When choosing a financial planner for your financial future, you must know how to evaluate his qualifications. Unfortunately, anyone can claim to be a financial planner, so you have to make sure you are asking the right questions to evaluate whether he qualifies.

But what steps do you take to evaluate a financial planner? Chances are you need to sift through a few financial planners in order to separate those who say they are financial planners from those who really are financial planners.

1. The first thing you need to do is evaluate a financial planner’s credentials. This involves looking at years of experience, college degrees, certifications, and clients.
2. The individual should be a certified financial planner (CFP) with a certification from the CFP Board of Standards, Inc. If the financial advisor has his own firm, then he should be a registered investment advisor. Independent contractors should be an investment advisor representative.
3. As you evaluate a financial planner ethics, you want to obtain his central registry depository number and look him up through what is called the “BrokerCheck” tool. This tool is offered by the Financial Industry Regulatory Authority to find financial planners that are ethical. Any problems will be reported to you via BrokerCheck.
4. Evaluate financial planner business practices by asking qualifying questions. Ask how they are paid. Whether you want to pick fee-only financial planner or not is your choice and judgment.
5. Always ask for an explanation of past experience and audited investment results, including gains and losses.
6. Some financial planners will have the names of clients on hand that are willing to be contacted by potential clients so that they can share their experiences.
7. Use the Internet to look up reviews and other statements about that financial planner.
8. When you evaluate financial planner attitudes, you don’t necessarily want to put too much emphasis on their sales skills or personality. A financial planner is not so much a salesman as they are a strategist when it comes to the market.
9. Lastly, ask for details on how your money will be managed. You should feel comfortable about the amount of trading they do for you and whether they have incentives to trade.

So when you evaluate financial planner attributes, the above are great ways for you to ensure you are finding the best person to handle your money. In addition to these tips, don’t be afraid to rely on your gut instinct as well.