A good financial planner should help you get a clear picture of your financial situation and lay the foundation for future investment decisions. Beware of planners who offer few or no alternatives in your investment plan, and avoid planners who use high-pressure sales tactics or promise unusually high rates of return on investments. Be on guard for possible Ponzi schemes masquerading as tax shelters, precious metals, commodities, high-tech stocks and other investments.
After you’ve gathered names of potential planners and checked them out with BBB, schedule exploratory meetings with each, where you’ll ask the following:
What is your professional background? Look for a strong track record of education and job experience covering a broad spectrum of financial planning needs. Ask whether he/she takes advantage of continuing education and training.
How long have you been a financial planner? Look for three or more years of experience and several more years of prior experience as a broker, insurance agent, accountant or lawyer.
Will you provide references? Get names of three or more clients whom the planner has counseled for at least two years. Ask them about their level of satisfaction, investment returns and intentions of staying with the planner.
What professional/trade organizations do you belong to? Membership in an industry group indicates the planner has met certain standards and requirements. Ask for an explanation of any title used by the planner, and about the requirements for use of the title and membership in, or certification by, the organization.
How do you get compensated? If the planner earns a commission, ask if he/she offers investments from one specific company or from many providers. If services are fee-based, find out how they are determined and what you’ll receive in return.
Start With Trust. For more consumer tips and information, visit wynco.bbb.org.