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Value Creation Blog

Choosing A Financial Professional - Financial Planning

Posted by Josh Patrick

financial advisorWhen we buy a car or a house, consider a school for our children, or plan our next vacation, what kind of approach do we take? For one thing, we take our time. We shop around and consider our choices.

Yet when it comes to selecting a financial consultant, not everyone takes such care.

MarketWatch.com senior columnist Chuck Jaffe sometimes speaks to audiences on this topic, and when he does, he likes to conduct an informal poll. First, he asks people to raise their hand if they have ever worked with a financial advisor. Many hands go up.

Next, he asks these people to keep their hands in the air if they hired the first financial advisor they met with in their search. Few if any hands are lowered. Then he asks them to keep their hands up if they did a background check on that person before agreeing to work together. After asking that question, Jaffe writes, “I have never had a single hand stay in the air.”1

Credibility and compatibility both matter. When it comes to the “alphabet soup” of financial industry designations, some of them carry more clout than others. Some of the most respected professional designations are Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC) and Chartered Financial Analyst (CFA). These designations are earned only after thorough examinations and a required curriculum of college-level studies in financial planning applications, retirement, insurance and estate planning fundamentals and other topics. Real-world experience must also complement this course of study.

Beyond a financial professional’s credentials and designations, you have the matter of compatibility. You don’t want to work with someone who insists that you fit into a preconceived box, for you are not simply Investor A, Investor B or Investor C who deserves this or that generic strategy. Better financial professionals really get to know you – and they will not be offended if you make the effort to get to know them.

This is a relationship-based business, and when a financial consultant offers a thoughtfully considered, personalized strategy to a client resulting from one or more discovery meetings, he or she has taken a step to earn the respect and trust of that client. Finer financial professionals abide by a client’s preferences and risk tolerance and take the client’s values, needs and priorities into account.

How do you “check out” a financial professional? You can visit www.finra.org (the Financial Industry Regulatory Authority) and use FINRA BrokerCheck to see if anything questionable has occurred in their career. If that financial professional is an investment advisor, you can go to the Securities and Exchange Commission and look at that advisor’s Form ADV at advisorinfo.sec.gov. Part 1 will tell you about any issues with clients or regulatory agencies; Part 2 will tell you about the advisor’s services, fees and investment strategies.2

In addition, AARP offers you a Financial Adviser Questionnaire, and websites like abika.com, paladinregistry.com and advisorbackgroundcheck.com can provide you with further information.  How did you find your financial advisor.  Email me at Jpatrick@stage2planning.com or hit our comment button to let me know.

Josh Patrick

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This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information should not be construed as investment, tax or legal advice. The publisher is not engaged in rendering legal, accounting or other professional services. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. If assistance or further information is needed, the reader is advised to engage the services of a competent professional.

Securities and Investment Advisory Services offered through NFP Securities, Inc. (NFPSI), Member FINRA/SIPC. Stage 2 Planning Partners and NFPSI are not affiliated.

This article is published for residents of the United States only.  Registered Representatives and Investment Adviser Representatives of NFP Securities, Inc. may only conduct business with residents of the states and jurisdictions in which they are properly registered.  Therefore, a response to a request for information may be delayed.  Not all of the products and services referenced on this site are available in every state and through every representative or advisor listed.

Topics: financial planning, wealth management

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