Broker Check
Finding a Financial Planner, You Can Trust

Finding a Financial Planner, You Can Trust

| August 30, 2017

While eating lunch with a client recently, they were telling me about an experience they had with a dentist.  It had been awhile since they had been, so it wasn’t a total shock when the dentist told them that they needed $3,000 of dental work.  Unfortunate or fortunately enough, my client didn't have the money at the time to do the work.  They figured they would tackle the work over a period of time and moved on.  At the end of the year, they realized they had some money left in their Flexible Spending Account at work, so they ran to the nearest dentist office that could get them in.  The new dental office proceeded to tell them that his teeth were fine and all they needed was some fluoride. 

My client’s experience shocked me; doesn’t a dentist follow a code of ethics.  Where were the dentist’s morals when recommending work that didn't need to be done?  Well, long story short, the dentist is no longer in the business, and my client’s teeth are looking good.

This got me thinking about my profession, and how someone selects a financial planner that they can trust.   The following are a few items to consider when you are looking for a financial professional:

  1. “Fiduciary” is a term that has been in the headlines a lot lately, and it’s very important to you when selecting a planner. What is a fiduciary?  It’s someone that has an ethical responsibility and commitment to act in the best interest of their clients.  In my opinion, this is probably the most important concept when finding a financial planner.  Be sure to look for one who always has your best interest in mind first, and not a salesperson that is interested in commissions and kickbacks from the products they are selling.  Just as the dentist should have had my client's best interest in mind, a fiduciary planner should only be providing you with solutions that meet your goals.
  2. I might be a little biased here, but you should work with a CERTIFIED FINANCIAL PLANNER™. This is an individual who has a fiduciary responsibility to you as mentioned above.  They’ve completed a comprehensive series of financial planning courses, passed the Certification Exam, and must have a minimum amount of experience before being considered for the certification.  They must meet and maintain all ethical guidelines, or they are subject to Board sanctions and the possibility of losing their certification.  Lastly, a CFP® is required to keep up with current theories and strategies by completing continuing education.
  3. Look for an independent Registered Investment Advisor (RIA). Not only are they independent and don’t have allegiances to a parent company, but an independent RIA will have many affiliations with other professionals who assist with tax planning, estate planning, insurance planning and more.  These relationships allow them to help their clients with complex financial needs without being tied to one product or company.
  4. Look for a planner that their only source of compensation comes from the fee paid directly from their clients. This could be an hourly fee, a retainer fee or a fee based on a percentage of assets under investment management.  It helps reduce the conflicts inherent in some financial product.  They should be completely 100% transparent and disclose all their compensation for their services.
  5. Run a background check on your potential planner. You can run a BrokerCheck here. Conduct a Google search on your planner.  Make sure they are who they say they are.  If they say they are a CFP ®, verify it on the Certified Financial Planning website
  6. Lastly, look for a planner that has clients like you. Make sure they have the knowledge and experience working with people who have similar goals, ages, professions, etc.

Selecting the right planning professional is a very important step in reaching your financial goals.   Without a plan, you have no roadmap for your goals; or any visibility of where you are at in relationship to those goals.  The right planner can enable you to make the appropriate course corrections to reach your goals, so choose wisely.

Thanks for taking a look!

Chad Duppong, ChFC®, CLU®, CFP®