How to pick the right financial planner

When it comes to financial planning, the first question that comes to mind for most people is whether or not they really need professional help. You can absolutely handle your own money and there is no problem with that, but it is much like doing your own repairs on a leaky sink. Some people have the knowhow to fix it, while others may need more than a plumber after they try and do it themselves. Fortunately, when it comes to your finances, there’s no risk of water damage.

Now there is no substitute for financial education when it comes to your money, but having an expert advisor can help you meet your financial goals faster. Depending on your goals there are many different types of experts you could go to. Financial counselors, tax preparers, investment advisors and stockbrokers just to name a few. No matter who you decide would be most beneficial to help you achieve your financial goals, make sure you pick the right one. Here are some tips:

1. Consider how they make their money – Depending on which type of advisor they are, how they get paid can tell you quite a bit about your potential future. Some make their money by selling you a specific product and others charge a percentage for assets under management.

2. Look at all of their credentials – There are a good number of licenses and certifications that financial professionals can achieve. Make sure that they are legitimate and current by seeing who administers the designation and call to verify if it is valid.

3. Get to know them – Personal finance can be taboo subject in polite company, and is often avoided in normal conversation. However, beyond how good they may be at their job, you have to get along with them to be comfortable enough to discuss sensitive and stressful talks about money.

4. Look at their current clientele – Ask your potential advisor what kinds of clients they currently manage money for and whether they have similar assets to your own. If they are used to managing billionaires’ accounts, they may not know how best deal with yours.

5. Understand fiduciary vs. suitability standards – Fiduciary means that the advisor has pledged to act in the client’s best interests at all time. Those who are not fiduciaries are often held to a lesser standard. Known as sustainability standard this means they just have to sell things that are suitable to you, not necessarily ideal