Unlike someone who calls themselves a CPA or doctor, almost anyone can call themselves a ‘financial planner’ or a ‘financial advisor’ regardless of their educational background and professional experience. In addition, not everyone is impartial in their advice and not everyone always acts in the best interests of their customers.
To make sure your financial planner is well qualified in personal finances and impartial in his recommendations, consider the following things:
1. Planning credentials: Have highly appreciated credentials in financial planning, such as Certified Financial Planner (CFP) or Personal Financial Specialist (PFS), confirms that the professional you intend to work with has acquired the education and experience necessary to serve as a financial planner. CFP and PFS credentials are assigned only to those people who have met education certification requirements and experience in personal finance planning. In addition, they must pass certification exams and agree to adhere to practice standards and continuing training requirements.
2. Competence in this field: Financial planners are planning professionals, not necessarily experts in the field. For example, a financial planner will be expert in tax analysis and planning, but unlike a certified public account (CPA) or an IRS (EA) registered agent may not necessarily be an expert on the subject when it comes to tax rules Likewise, a might be ademptive in drawing up an investment plan, but unlike a Chartered Financial Analyst (CFA) may not be an investment authority. Work with a financial planner who is also a subject matter expert in those areas of personal finance that are important for achieving your financial goals.
3. Customer Specialization: Not all financial planners serve all types of customers. Most specialize in serving only certain types of customers with specific profiles. For example, a personal planner can build their experience and customize their services to serve only individuals and families who perform certain professions or a particular stage of life with specific financial goals and net worth. Ask if the planner specializes in serving only certain types of customers with specific profiles to determine if it suits your situation and financial goals.