Questions You Need To Ask Before You Hire a Financial Planner

If when someone asks you what is the Disney ticker (DIS), all you can think of is Winnie the Pooh's tiger pal, then maybe it is time to admit it: When it comes to financial planning, you need help!

There's a huge amount of financial advice out there, ranging from free to extraordinarily expensive. It becomes complicated to evaluate and compare the services, costs (some hidden), and performance of all the people who are advertising that they're ready to help you manage your money.

The labels don't help much. The term "financial planner" can be used by almost anyone, and is often mistaken for those who truly can use the term "Certified Financial Planner," or CFP, because they have had extensive education, testing, experience and certification.
CFPs have passed courses not only in investments, but in insurance, taxation, estate planning, retirement income planning and other aspects of creating a well-rounded financial plan.

A registered CFP has a fiduciary duty to "at all times place the interest of the client ahead of his or her own." To learn more and search for a CFP in your area go to this Web site.

Certified financial planners may be compensated in different ways. Some only charge a fixed fee for their advice. They are called "fee-only" planners, and you can find them at the Web site of the National Association of Personal Financial Advisors.
Other planners are paid through commissions on the products they sell, or a combination of fees and commissions.

What about stockbrokers? Many brokerage firms now call their employees "financial advisors" or "wealth managers" instead of stockbrokers. These brokers may give investment advice -- but unless they are registered as "investment advisers," they do not have the same fiduciary duty to their clients to fully disclose all conflicts of interest, including commissions or other payments they earn on the sale of products.