How to Choose a Financial Planner

Find someone to help you plan and meet your financial goals for the rest of your life.

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Finding the right fit.

When I'm looking for a new doctor—some sort of specialist I haven't seen before—I want to know that this person fits my specific needs. I need to be clear that they've seen my situation (whatever it happens to be) not just before, but many times before. And I like to know that someone else I trust has faith in this new specialist, as well. Picking a financial advisor should be no different. But it's tricky, Terry Savage writes in the Chicago Tribune, because financial advice can come full of “hidden incentives, costs and commissions.” Savage suggests finding a Certified Financial Planner and asking some important questions before settling on the financial planner for you.

What's in it for them?

Does your planner charge a flat fee, or do incentives and commissions motivate them? I don't know about you, but I want my financial planner to work for me, not himself. Savage says to look for fiduciaries: “Fiduciaries are obligated to put their clients’ interests ahead of their own,” she writes. If you work with a fiduciary, they will be honest about any extra compensation, commissions, or incentives that they receive. Not all financial planners are fiduciaries, and according to Savage, it's important that your advisor, “put it in writing that he or she adheres to fiduciary standards.”

Who are you dealing with?

When you put so much thought into picking a financial planner, you want to make sure you will be working with them directly. Often times financial planners have so many clients that they can only meet with you once a year. Any other time you need advice you may have to speak to an assistant. No matter who you're dealing with you should be very clear on the process for making changes in your portfolio. Will you be contacted every time? If not, what's the bar for when you'll receive a notice or call. If you're not comfortable with this amount of communication, it's okay to insist on more.

Do they know you?

Trust me, it's worth it to put the time in to really know your financial planner, but if they don't want to know about you, that's a huge red flag. As Carl Richards, author of The One-Page Financial Plan told me for my recent column on, of the first hour you spend meeting with any financial advisor, 15 minutes should be taken up with the advisor asking you really "thoughtful questions." The other 45 should be you talking. In other words, when you're hiring someone finding a good listener is key.

This article was originally written by Jean Chatzky for SavvyMoney®.