Finance

How to Make Sure You Are Working with a Real Certified Financial Planner

Financial planners counsel their clients on how to best invest, save, and nurture their money. They can advise you on a plan to meet specific financial goals – like readying yourself to buy a home or give you a macro view of your finances and the way your various assets interplay with each other. Some specialize in estate planning or retirement, while others consult on an entire assortment of financial matters.

Anyone can play a financial planner

Anyone can hang out a sign as a financial planner, but that doesn’t make that person an expert. They can also tack on an alphabet of letters following their names, but CFP (certified financial planner) is the most noteworthy credential. A CFP has passed a hard test administered by the “Certified Financial Planner Board of Standards” about the essentials of individual finance. CFPs also must commit to continuing their education on financial matters and ethics courses to maintain their credentials.

The CFP credential is a sign that a potential planner will give good financial advice. Still, even ones who pass the exam may come up short on integrity or skills. As with all things pertaining to your money, be careful in choosing the right planner.

Commissions or hourly rate

Characteristically, financial planners make their living by charging hourly or flat feesor commissions for their services. A commission is a fee that is paid when someone buys or sells stocks or other investments. For many reasons, you might want to dodge financial planners who rely on commissions for their livelihood.

Fee for service

An increasing number of financial planners earn their living only when you pay them a fee for their services. These self-governing financial planners don’t get a cut from fund companies or life insurers. You might pay them a flat fee, such as $1,500, for a financial plan. Or you could pay a yearly fee, often 1% of all your assets—investment, college-savings, retirement and other accounts—they are handling for you. Still others charge by the hour, like lawyers.

Some only work with very rich

You might also come across financial planners who cater solely to the rich and refuse clients having less than $250,000 for investments. But if you live in Tampa, Florida you should consider certified financial planner Tampa.