How do I Choose the Best Financial Planning Services?

Lainie Petersen

Choosing the best financial planning services requires that you investigate the financial planner's credentials, understand the planner's approach to personal finance, and assess his or her ability to provide you with unbiased information and services. Good financial planning services require financial advisers who are committed to serving your best interests and helping you to meet your financial goals. It is also important that you communicate your needs and circumstances to a financial planner before committing to working with the person. This helps ensure that you and the planner are a good match.

A certified financial planner must complete an education program and pass a certification test.
A certified financial planner must complete an education program and pass a certification test.

In some countries, companies and individuals offering financial planning services are subject to legal regulation. An individual or company offering financial planning must be licensed and, in some cases, bonded, before offering financial advice. In the United States, the regulation of financial planning services is not well defined. If a financial planner sells securities, insurance, or other financial products, in most cases the planner must be licensed in the state in which he practices. On the other hand, it is possible for someone to give more general financial advice and call herself a financial planner without being licensed or having any credentials at all. For this reason, it's important to check out the licensing, certification, and credentials of any financial planner with whom you work.

In the United States, the designation of Certified Financial Planner (CFP) is an accepted industry standard of proficiency. To earn this credential, a certified financial planner must complete educational program, pass an exam, and agree to uphold a code of ethics. It is absolutely acceptable to ask anyone offering financial planning services if they hold the CFP or, if you are outside the United States, a credential with similar standing in your country. It is also a good idea to find out if this financial planner has offered financial planning services to someone in your financial situation. For example, if you have quite a bit of money, ask the financial planner if he has assisted clients with a similar level of wealth.

Another thing to be concerned about is how your financial planner gets paid. Some financial planners work on commission, earning a percentage of whatever securities or insurance policies you buy from them. Other financial planners offer a fee-based service; they get paid for their advice, not for what they sell. Be sure to check the code of ethics subscribed to by your financial planner. If it contains a fiduciary pledge, your financial planner has committed to giving you advice that is in your best interests. If she has only pledged to make suitable advice for your situation, her advice may promote her interests as well as your own.

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