Decide on Your Ideal Financial Planner

Financial planning can be helpfulfor everyone, regardless of theirincome or experience handlingtheir money. It is important to understandthe process you will go throughbefore you hire a financial planner.Deciding on which planner to hire is akey decision, akin to finding a physicianor attorney. Since you don't want tomake this decision more than once, youshould choose very carefully. The followingare the recommended criteria youshould use in your search:

• Credentials. Your search shouldbegin with advisors who are CertifiedFinancial Planner™ practitioners. To becomea Certified Financial Planner™ practitioner,the advisor must pass a rigorousnational exam, complete 3 years of relevantexperience, agree to abide by astrict code of ethics, and maintain 30hours of continuing education overrolling 2-year periods.

• Experience. It is strongly recommendedthat you choose an advisor whohas a minimum of 5 years' experience inthe financial planning field. There is anold saying, "There is no substitute forexperience," and in the world of personalfinance, this is a very true statement.

• Compensation. When hiring afinancial planner, it is important for youto understand how they are being compensated.There is no right or wrongmethod of compensation, but you mustknow how your financial planner isbeing paid so that you can review theirrecommendations in the proper perspective.There are generally three types ofcompensation: fee only, commissiononly, and fee plus commission.

A fee-only financial planner receivesfees directly from the client and neverreceives commissions from the sale ofproducts. Under a recent ruling by theCertified Financial Planner™ Board ofStandards, a Certified Financial Planner™practitioner describing their services asfee-only is prohibited from receiving commissionsin any client relationship at anytime. Commission-only financial plannersdo not charge a fee for the planningwork, but rather receive commissionsfrom the sale of products recommendedas a result of the planning work. There arealso many financial planners who charge afee for developing your financial plan,and then receive commissions if you buyrecommended products.

• Chemistry. Ideally, when youchoose a professional advisor, you will beselecting someone with whom you willwork the rest of your life. However, it isnot unusual to find a competent advisorwho for some reason you do not clickwith. Most professional advisors willmeet with you initially without charge.This first meeting is used to determinethe scope of the work to be performed.You should also use this first meeting asan opportunity to determine if the advisoris someone you would be happyworking with for the long term.

To find a Certified Financial Planner®practitioner located in your area, call800-322-4237 or visit www.fpanet.org.