My husband has a small business, I'm in a W-2 and also earn consulting fees on the side; we have six or seven bank and retirement accounts plus a house - we need to get our finances consolidated/organized, and we urgently need to set up a trust for our young son.
Regardless of the type of advisor you select, you really need to spell out the type of advice you're looking for as well as your expectations. Then ask the advisor how they approach dealing with a client in your situation. Ask if they've handled the kinds of things you're asking about.
Too often the public and those in the industry simply thing that financial planning is synonymous with investing. Not every client needs investing help. Not every client has assets to invest. And regardless of how much and whether or not you are investing, true financial planning can benefit you and anyone else.
Generally, someone with a financial planning designation ascribes to a certain set of standards for ethics and professionalism. And they follow a certain approach to planning engagements. The CFP Board outlines this (see www.CFP.net). But many other professional designations do, too: ChFC (more insurance focused), CPA/PFS (the financial planning side for accountants). When interviewing an advisor, you may find the checklist and questions on the public site of the Financial Planning Association of use here: https://www.fpanet.org/FindaPlanner/ChoosingaPlanner/ .
What it sounds like you need is a combination of cash flow management, tax planning (key for small business owners), help creating an Investment Policy road map (to add structure to your investing process and take the emotion out of it - especially useful if you are a DIY investor) and estate plan. You may find that one adviser has these skill sets or works as part of a team or a larger firm with access to these resources. But you first need to ask and be clear of what you expect for your fee.
You may find it best to work with a fee only or at least a fee-based advisor; someone affiliated with a Registered Investment Adviser firm that offers planning. Some may even offer investing help as needed.
The general approach that the adviser you're looking for should take is leading with the plan and not simply trying to lead with an investment or insurance product. A good adviser focuses on solutions and does not lead with products. Remember the old adage about the carpenter: When the only tool in the box is a hammer, then all problems look like a nail.
I agree with Eric's answer above, as well as Steve's. But a "Financial Designation" is not enough. Just because someone has passed the CFP test does not necessarily mean that 1) they are fee-only and not just product pushing salespeople, and 2) actually practice financial planning.
My suggestion is that you visit NAPFA.org. The National Association of Personal Financial Advisors is an elite group of STRICTLY fee-only advisors. In order to be admitted, you must be a CFP in good standing, be quite experienced, and be VERY strictly FEE-ONLY. Individuals who sell insurance in any way (even being a silent partner in an insurance agency) are not admitted. Their continuing education requirements are considerably above that of the CFP Board. This group has been strongly recommended by Clark Howard on his TV and radio show as well.
They have a search feature where you can find advisors in your area. http://napfa.org/
Jon Castle http://www.WealthGuards.com
Interview the prospective advisor as if he or she is applying for a job. Ask about their experience and their philosophy. Ask them to describe how they'll work with you. Ask about how they charge for their services and ask if there's anything differentiated about how they approach investing. Ask for references.
Look at their website and their published materials. Then it's up to you to decide if this person is credible, open and professional; and well suited to your personality. In short, someone whom you feel comfortable with and who you believe will place your interests first.
The easiest way to not have this happen to you is to use a fee only advisor. Fee only advisors get paid a fee to complete your financial plan or a fee to manage your assets, but they aren't incentivized to push products. Fee only advice is most prevelant in the independant space. Brightscope is a great place to start. You can either find a fee only advisor in your area or with advances in technology you can even choose someone across the country. Bottom line is do some research, but stick with fee only.
Here are some of the questions you should always ask when hiring any financial professional: -What experience do you have, especially with people in my circumstances? -Where did you go to school? What is your recent employment history? -What licenses do you hold? Are you registered with the SEC, a state, or the Financial Industry Regulatory Authority (FINRA )? -What products and services do you offer? -Can you only recommend a limited number of products or services to me? If so, why? -How are you paid for your services? What is your usual hourly rate, flat fee, or commission? -Have you ever been disciplined by any government regulator for unethical or improper conduct or been sued by a client who was not happy with the work you did? -For registered investment advisers, will you send me a copy of both parts of your Form ADV? -Does an independent custodian hold my assets?
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Bronwyn - Apart from the recommendations that have already been given, you could search for an advisor who offers a money-back guarantee, or who does not take payment until your are satisfied with their work. Most important is to identify someone who is qualified to provide the type of advice that you need, and who is objective.
Best of luck,
The Certified Financial Planner Board of Standards (www.cfp.net) has a list of questions that you may want to ask your potential advisor. Use this link to find a CFP professional in your area - http://www.cfp.net/find/EnhancedSearch.aspx
http://www.cfp.net/learn/knowledgebase.asp?id=6 10 Questions to Ask When Choosing a Financial Planner
1 Q. What experience do you have? A. Find out how long the planner has been in practice and the number and types of companies with which she has been associated. Ask the planner to briefly describe her work experience and how it relates to her current practice. Choose a financial planner who has experience counseling individuals on their financial needs.
2 Q. What are your qualifications? A. The term "financial planner" is used by many financial professionals. Ask the planner what qualifies him to offer financial planning advice and whether he is recognized as a CERTIFIED FINANCIAL PLANNER™ professional or CFP® practitioner, a Certified Public Accountant-Personal Financial Specialist (CPA-PFS), or a Chartered Financial Consultant (ChFC). Look for a planner who has proven experience in financial planning topics such as insurance, tax planning, investments, estate planning or retirement planning. Determine what steps the planner takes to stay current with changes and developments in the financial planning field. If the planner holds a financial planning designation or certification, check on his background with CFP Board or other relevant professional organizations.
3 Q. What services do you offer? A. The services a financial planner offers depend on a number of factors including credentials, licenses and areas of expertise. Generally, financial planners cannot sell insurance or securities products such as mutual funds or stocks without the proper licenses, or give investment advice unless registered with state or Federal authorities. Some planners offer financial planning advice on a range of topics but do not sell financial products. Others may provide advice only in specific areas such as estate planning or on tax matters.
4 Q. What is your approach to financial planning? A. Ask the financial planner about the type of clients and financial situations she typically likes to work with. Some planners prefer to develop one plan by bringing together all of your financial goals. Others provide advice on specific areas, as needed.
Make sure the planner’s viewpoint on investing is not too cautious or overly aggressive for you. Some planners require you to have a certain net worth before offering services. Find out if the planner will carry out the financial recommendations developed for you or refer you to others who will do so.
5 Q. Will you be the only person working with me? A. The financial planner may work with you himself or have others in the office assist him. You may want to meet everyone who will be working with you. If the planner works with professionals outside his own practice (such as attorneys, insurance agents or tax specialists) to develop or carry out financial planning recommendations, get a list of their names to check on their backgrounds.
6 Q. How will I pay for your services? A. As part of your financial planning agreement, the financial planner should clearly tell you in writing how she will be paid for the services to be provided. Planners can be paid in several ways: A salary paid by the company for which the planner works. The planner’s employer receives payment from you or others, either in fees or commissions, in order to pay the planner’s salary. Fees based on an hourly rate, a flat rate, or on a percentage of your assets and/or income. Commissions paid by a third party from the products sold to you to carry out the financial planning recommendations. Commissions are usually a percentage of the amount you invest in a product. A combination of fees and commissions whereby fees are charged for the amount of work done to develop financial planning recommendations and commissions are received from any products sold. In addition, some planners may offset some portion of the fees you pay if they receive commissions for carrying out their recommendations. 7 Q. How much do you typically charge? A. While the amount you pay the planner will depend on your particular needs, the financial planner should be able to provide you with an estimate of possible costs based on the work to be performed. Such costs should include the planner’s hourly rates or flat fees or the percentage he would receive as commission on products you may purchase as part of the financial planning recommendations.
8 Q. Could anyone besides me benefit from your recommendations? A. Some business relationships or partnerships that a planner has could affect her professional judgment while working with you, inhibiting the planner from acting in your best interest. Ask the planner to provide you with a description of her conflicts of interest in writing. For example, financial planners who sell insurance policies, securities or mutual funds have a business relationship with the companies that provide these financial products. The planner may also have relationships or partnerships that should be disclosed to you, such as business she receives for referring you to an insurance agent, accountant or attorney for implementation of planning suggestions.
9 Q. Have you ever been publicly disciplined for any unlawful or unethical actions in your professional career? A. Several government and professional regulatory organizations, such as FINRA (formerly NASD), your state insurance and securities departments, and CFP Board keep records on the disciplinary history of financial planners and advisers. Ask what organizations the planner is regulated by and contact these groups to conduct a background check. All financial planners who have registered as investment advisers with the Securities and Exchange Commission or state securities agencies, or who are associated with a company that is registered as an investment adviser, must be able to provide you with a disclosure form called Form ADV Part II or the state equivalent of that form.
10 Q. Can I have it in writing? A. Ask the planner to provide you with a written agreement that details the services that will be provided. Keep this document in your files for future reference.
One thing I would like to add to the other's advice is to verify that the advisor's fiduciary responsibility is solely to you, the client. That is, their legal and ethical responsibility is to provide you with advice that is best for you, above all others, including themselves. You should require they put in writing. If they are unwilling, I would say you that is a good sign to look elsewhere.
You can go on the NAPFA website to see the Fiduciary Oath NAPFA members sign and give to their clients. (http://www.napfa.org/about/FiduciaryOath.asp). You should expect nothing less from any advisor you work with.
The fiduciary responsibility of the advisors that work for insurance companies or brokers is often to to the company they sell product for, rather than to the client. This means they are responsible for maximizing the company’s profits and their commissions. You can see there is an obvious conflict of interest that is not in your favor.
You can find such a planner at NAPFA and Garrett Planning Network. Planners associated with these organizations are required to serve the client first and always do what is in their best interest. (Full disclosure – I am a member of both organizations.)
Sounds like you paid for a one-time evaluation and that's not really what you want or needed. Another way to go is to select a fee only advisor who is compensated on the long-term success of your portfolio. Find someone who has a low fee, low turnover and tax sensitive approach.
Ask to see a copy of a sample financial plan 1st and ask for referrals. Also, ask if the plan comes with a 100% money back guarantee. If you don't see value in the plan, they you shouldn't have to pay.