1. You must first do some serious self-examination. Identify why you think you need a financial planner. Perhaps you’re going through a transition—say, you have a new baby or you’re recently divorced. Maybe you need to update your retirement plan or get a reality check on saving for college. Do you require frequent contact with your adviser, or are you okay with annual updates? What is your tolerance for risk?
SEE ALSO -- QUIZ: Do You Need a Financial Planner?
2. You must master the alphabet soup. If you’re looking for broad-based advice about various aspects of your financial life, hire a certified financial planner, or CFP. These professionals must pass an extensive, ten-hour exam and meet other education and ethics requirements to gain the credential. A registered investment adviser, or RIA, is registered with the Securities and Exchange Commission or a state securities regulator and can manage your investment portfolio. A chartered financial consultant (ChFC) specializes in insurance and estate planning. A certified public accountant (CPA) can help with tax planning.
3. A good man (or woman) is easy to find. We recommend fee-only advisers because they are unlikely to sell you inappropriate financial products. Many of them charge per visit; expect to pay $100 to $300 an hour. Some planners levy a yearly fee—commonly 1% to 2% of your assets. If you plan to take that route, you’ll likely need to meet a minimum asset requirement (typically $250,000). When you sit down for the initial interview, establish upfront how much you’ll pay. To find a certified financial planner in your area, go to the Financial Planning Association or the National Association of Personal Financial Advisors. The Garrett Planning Network is a network of fee-only advisers.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
4. You need to make sure you’re on the same page. One way to ensure that your adviser’s interests align with yours is by asking the right questions. Some basic queries include: What can you offer me? Are you conservative or aggressive? What do I do if I have a question? Look for someone whose clients are in situations similar to yours and who is available as often as you need him.
5. Nobody’s perfect. An adviser who charges based on asset size may want to handle as much of your money as possible. That could mean, for example, that he might not advise you to pay off your mortgage, even if it makes sense for you to do so. Such conflicts may be unavoidable, but awareness will help you stay a step ahead. If you’re worried about potential fraud, a quick Google search should unearth the worst abuses. For a deeper look, check out an adviser’s Form ADV. If the adviser is also a registered broker, you can get a free report from FINRA.org.
6. Breaking up is hard...and expensive. If your adviser isn’t listening to you or taking your goals into consideration, it’s time to split up. But unlinking your finances can be expensive; prepare to shell out termination and transfer fees. If it’s an amicable breakup, however, your old and new advisers can get together to make the transition smoother.
-
Here's How To Get Organized And Work For YourselfWhether you’re looking for a side gig or planning to start your own business, it has never been easier to strike out on your own. Here is our guide to navigating working for yourself.
-
How to Manage Risk With Diversification"Don't put all your eggs in one basket" means different things to different investors. Here's how to manage your risk with portfolio diversification.
-
457 Plan Contribution Limits for 2025Retirement plans There are higher 457 plan contribution limits for state and local government workers in 2025 than in 2024.
-
What Does Medicare Not Cover? Seven Things You Should KnowHealthy Living on a Budget Medicare Part A and Part B leave gaps in your healthcare coverage. But Medicare Advantage has problems, too.
-
13 Smart Estate Planning Movesretirement Follow this estate planning checklist for you (and your heirs) to hold on to more of your hard-earned money.
-
Medicare Basics: 11 Things You Need to KnowMedicare There's Medicare Part A, Part B, Part D, Medigap plans, Medicare Advantage plans and so on. We sort out the confusion about signing up for Medicare — and much more.
-
The Seven Worst Assets to Leave Your Kids or Grandkidsinheritance Leaving these assets to your loved ones may be more trouble than it’s worth. Here's how to avoid adding to their grief after you're gone.
-
SEP IRA Contribution Limits for 2024 and 2025SEP IRA A good option for small business owners, SEP IRAs allow individual annual contributions of as much as $69,000 in 2024 and $70,000 in 2025..
-
Roth IRA Contribution Limits for 2024 and 2025Roth IRAs Roth IRA contribution limits have gone up. Here's what you need to know.
-
SIMPLE IRA Contribution Limits for 2024 and 2025simple IRA The SIMPLE IRA contribution limit increased by $500 for 2025. Workers at small businesses can contribute up to $16,500 or $20,000 if 50 or over and $21,750 if 60-63.
