Finding the right financial planner will take some time and careful consideration, but it is time well spent. The goal is to find a qualified, experienced person who understands and respects your ideas about handling your money. Don’t make the mistake of choosing a stockbroker or financial planner from the Yellow Pages. Ask for referrals from people you trust: family members and friends, your accountant, lawyer, banker, or insurance agent. Also, various financial planning associations will provide you with the names of financial planners in your area. See For More Information.

Interview at least three individuals to find one that’s right for you. Some credentials you may want to look for in a financial advisor or planner:

Education. Financial planners often have a Bachelor’s degree in business, accounting, or finance, but it is not a legal requirement, nor is it a requirement for most certifications. Many certifications are based on training after college. You’ll need to
decide how important a relevant college degree is to you.

State registration. Many states require that financial planners be registered and/or pass exams. If your advisor is going to sell certain financial products (e.g., securities or insurance) additional licensing is required. Check with your state’s Securities Administration or Department for state-specific requirements.

CERTIFIED FINANCIAL PLANNER.^TM  This certification from the CERTIFIED FINANCIAL PLANNER BOARD OF STANDARDS is awarded to people with at least three years of work experience in the financial planning field, who have completed an approved course of study, passed a rigorous exam on financial planning, and met certain other ongoing educational and ethical requirements.

Chartered Financial Consultant (ChFC). A ChFC certificate is awarded to people who have completed a designated course of study and passed the exams on personal finance offered by The American College in Bryn Mawr, Pennsylvania.

Certified Public Accountant (CPA). CPA certification ensures that a person has passed a stringent examination on accounting and tax preparation, but it does not indicate training in other areas of finance. For that, you’ll want to find out if a CPA has also been certified as a Personal Finance Specialist (PFS), a designation awarded by the American Institute of CPAs to those who meet certain requirements in the area of personal financial planning.

Chartered Life Underwriter (CLU). People with CLU certification have completed course work and taken exams regarding life insurance. They do not necessarily have training in other areas of financial planning.

Some financial planners not only provide insurance advice, but also sell financial products (e.g., investment products). They may work for a flat fee, for a commission, or for a combination of both. Those who work on commission make most or all of their income from the sale of investments and other financial products. "Fee-only" financial planners may be more expensive, but they do not make a commission by selling you certain products. Their fees may be based on an hourly charge, a specific charge associated with a specific service, or a percentage of a client’s assets or income. Note that although fee-only planners do not sell financial products or charge commissions, it is likely that whoever handles the purchase or sale of investments your planner recommends will charge a commission.