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Shopping tips for a financial planner

Ah, heartbreak. How do you trust again? How do you start all over when someone you trust miserably disappoints you? One day at a time, of course and by treading very slowly.

Financial Advisor

I’m not talking about a boyfriend or husband who may have crushed you emotionally, mentally, physically or all of the above. Rather, the wrong financial planner can leave you with incredible heartache and a significant hole in your pocket.

I should know. After my first financial planner apparently lied about specific funds and mismanaged my hard-earned money, well, it turns out my new financial planner has been all too eager to aggressively recommend certain funds, which make no sense based on my goals. Let’s just say he was the rebound relationship. Telling me things he knew I wanted to hear as I was down and out and yes, looking for a decent return on my money.

Seeking LTR

As I pick up the pieces and restrategize for many happy returns, there are specific ways to bolster that financial prowess to enter a flourishing relationship with a reputable planner. One of the first questions to ask, whether we pursue referrals from our family, friends and neighbors or call professional organizations such as the Garrett Financial Planning Network, is whether or not you want a commission or fee-based planner.
“It’s difficult to justify a planner who gets a cut. I’m opposed to a planner who has conflicts of interest. You won’t get objective advice from someone who has a vested interest in a product,” says Dan Solin, author of ‘The Smartest Investment Book You’ll Ever Read’ and ‘The Smartest 401(k) Book You’ll Ever Read’.

Commission-based planners essentially earn money based on products you invest in whereas fee-based planners get a flat fee such as charging an hourly rate. Solin points out that fee-based planners are naturally going to be more objective since they don’t get a commission from particular funds so it’s assumed they’d recommend some over others based on performance, not kickbacks.

While qualifications may be important to you such as a CFP (certified financial planner) or a member of the National Association of Personal Financial Advisors, it’s important to ask your future financial guru questions such as creating a mock financial plan: what will the end result be, how will it benefit me, and what are the historical returns?

Play the field

Before you commit to a planner it’s wise to date – er, shop around. “It’s always a good idea to interview different people,” says Solin. Most planners and advisors will agree to an interview without charging you. “It’s important to have good chemistry. You need to feel comfortable that they care about your finances.”
In addition, you can shop around to different teams. Whether you shop for a planner who guides you on cash flow management, education planning, retirement planning, investment planning, risk management and insurance planning, tax planning or an advisor who renders investment advice and financial planning services using proper asset allocation, you (and your spouse) should meet with several people initially before settling down. Once you secure your finance expert, check in frequently either quarterly or semi-annually to review your portfolio and your financial goals.


“It’s not you, it’s me”

Alas, all good things may come to an end so at some point it may just not be working. Keep in mind you can terminate your relationship at any time and just as your life evolves so do your financial goals. Maybe you recently gave birth or perhaps you’re in the midst of a divorce. Whatever the scenario, your life will change and you may need a new financial planner to better fit your new status.

As you evaluate your financial goals while finding the right match so to speak, you may want to consider staying single for a while. Solin recommends the realization that most people may not even need outside guidance at all. His books, for instance, specifically outline ways for people to become actively engaged and understand the markets. “Become your own advisor by focusing on asset allocation with a globally diversified portfolio.”

Above all, it’s important to stay true to yourself to take ownership, research and question things, and become educated. “The more educated people become, the better they will be to manage their own finances and evaluate the quality of advice they’re getting.”

Note: any investing or planning as a result of this article is done at your own risk. SheKnows takes no responsibility in the falter or flourishing of your nest egg.

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