Several types of planners specialize in a variety of areas:
When researching planners and establishing a list of prospective candidates, keep in mind that planners are required to maintain their credentials to operate in a specific area of expertise.
According to Coyle's book, "How to Retire Young and Rich," certified financial planners (CFPs) and chartered financial consultants (ChFCs) are required to pass a series of exams relevant to their field. CFPs maintain a broad base in all aspects of personal finance, and ChFCs have an insurance background.
To meet with a prospective planner, prepare questions that are important to you. Do not be afraid to ask tough questions and demand specifics. It's your money. If you don't like the answers, look elsewhere.
Ask to see the planner's ADV form (for "adviser"), a résumé of sorts that details the adviser's educational background, credentials, compensation methods, and business affiliations. To register as a financial adviser, applicants must file this form with the Securities and Exchange Commission (SEC).
Do a record check. Coyle recommends contacting the SEC (202-942-7040) and your local state securities agency (Department of Commerce). You can ask the prospective planner if he or she has ever been disciplined, but the above contacts could be more revealing and offer more detail if there has been a problem.
Ask for references, but be careful. It's easy for planners to name two or three people who will say good things about them. Instead, ask for professional references from other investment professionals or lawyers who are familiar with the adviser.
Home & Family Finance® Resource Center
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