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Financial Planning

How to Choose Among Financial Professionals

Finding the right person

Most people in search of an adviser want guidance and reassurance from someone they trust. And trust, after all, is the linchpin of a profitable relationship.

You should interview at least three individuals or firms and decide which, if any, is a good fit for you and your concerns. In addition to asking a series of pertinent questions and getting a breakdown of an adviser's fees, gauge his or her personal qualities. Does he or she remind you of someone you like and respect in your business or personal life? Other issues to consider:

Weigh values versus the bottom line. Would you feel more comfortable working with someone who's strictly a numbers person or someone who's more attuned to your values and aspirations? Ron Roge, who runs a financial-planning and money-management firm in Bohemia, N.Y., says he tells potential clients that investments are only one piece of financial planning. "I tell them I'm here to answer questions they've never thought of before, such as how they can afford to support themselves until age 100," says Roge.

Another divide separates optimists -- who think that the next bull market will solve all your problems and who will urge you to take more chances -- and pessimists, who want you to squirrel away every dime and may end up quashing your dreams. To discern the difference, ask about a planner's experience with other clients. An adviser who's accustomed to horror stories is apt to think failure is the rule and can be stiflingly cautious. A braggart will bluster his way off your list.


Have a give-and-take discussion. Financial advising "should be a negotiation," says David Armstrong, a partner in Monument Wealth Management, in Alexandria, Va. Don't start with unrealistic expectations, such as an immediate five-percentage-point boost in your investment returns or a magic plan to get out of debt by Christmas. That's not how this procedure works.

But an adviser also shouldn't jump all over you for your mistakes when what you need is a solution. You dropped a bundle on a badly timed real estate investment? Perhaps you can sell out and turn your losses into tax benefits. Or get back in when the market starts to turn. In this case, of course, it helps to have an adviser who understands real estate (quite a few advisers used to work in commercial development).

Check credentials and experience. Many guides to choosing a planner or adviser will help you sort through the alphabet soup of credentials. Unlike the CFP, or certified financial planner, dozens of other designations are unfamiliar. Ever heard of a CRFA (certified retirement financial adviser)? Or a CASL (chartered adviser for senior living)? Doubtful.

Plus, credentials go only so far. Russell Wild, a planner in Allentown, Pa., tells customers he holds an MBA, but you have to look on his Web site or registration forms to see that he has a graduate certificate in personal financial planning. Wild is a skeptic about the whole deal. "The truth is that all of these designations require a minimum of study," says Wild. "They aren't a guarantee of anything."


More valuable are personal disclosures to regulators. Investment advisers aren't typical salespeople; they have to put your interests before their firm's. They can have discretion, if you agree, over your accounts. Advisers must complete Form ADV with the Securities and Exchange Commission (

This form has basic information about the number of clients, assets under management and run-ins with regulators, but it can also give you insight into an adviser's philosophy and methods. Wild, for instance, links from his Web site to his ADV, where you can see what he charges, why he prefers index funds, the investment companies he likes -- and the fact that he invests his own money in the same places he recommends to his clients.

Brokers, who accept commissions and are also called registered representatives, file similar information with Finra (go to and click on "BrokerCheck"). The records aren't as enlightening as an adviser's ADV, but you'll see the broker's experience, licenses, work history and sources of income. A broker must also disclose outside business ventures, so you'll be prepared to refuse if a broker tries to sell you units in a private partnership with which he or she is personally involved.

Financial planners are not likely to be brokers, nor do they have to be investment advisers. They don't have to register with the SEC if all they do is fire up a computer, take your financial information, run it through a portfolio-analysis program and advise you to buy a lineup of index funds. Then again, some used to work on Wall Street and are registered advisers and experts.