By Susannah Snider
Kiplinger's Money Power
5:30 AM EDT, April 24, 2013
Picking an adviser is like choosing a mate. Here's how to find the right match:
1. 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?
2. 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. 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 charge per visit; expect to pay $100 to $300 an hour. 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 (http://www.fpanet.org/findaplanner) or the National Association of Personal Financial Advisors (http://findanadvisor.napfa.org). The Garrett Planning Network (http://garrettplanningnetwork.com) is a network of fee-only advisers.
4. 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. 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 at http://www.sec.gov. If the adviser is also a registered broker, you can get a free report at http://www.finra.org/investors/toolscalculators/brokercheck.
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.
(Susannah Snider is a staff writer at Kiplinger's Personal Finance magazine. Send your questions and comments to firstname.lastname@example.org. And for more on this and similar money topics, visit http://www.Kiplinger.com.)
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