1Understand Your Needs

Before you start looking to find a financial advisor, you need to be very clear about what you need from such a professional.

At this point, you should be asking yourself if you need all-inclusive planning advice, a review of your retirement portfolio, or even assistance with business planning matters.

It is imperative that your needs are clear because these professionals have different areas of expertise, so you need to find one who is capable of effectively addressing your specific situation. This will be the first step that will help you narrow down your list of prospective financial advisors.

2 Look For Referrals

Now that you know what you’re looking for, you should seek out the advice of other people by consulting with them. You can always begin with family and friends whose opinions and advice you can trust, and then move on to professionals who you are acquainted with, including accountants, etc. In your conversations, you should ask for referrals. It is definitely better to find a financial advisor through the suggestions from professionals rather than seeking out money advisors based on information obtained from the yellow pages or the internet.

3Review the Professional Designations

In your search to find a financial adviser you are bound to come across various designations and certifications shown as acronyms. You should know what each of them means because it will explain to you what a prospective advisor can do for you.

Some of these acronyms include:

• Certified Public Accountant (CPA) – This is an experienced accountant who has attained the required education and licensing credentials. A CPA will be very helpful with various tax issues.

• Personal Financial Specialist (PFS) – CPAs who have undergone advanced financial planning education use this term. These professionals also use the term CPA/PFS.

• Certified Financial Planner (CFP) – In financial planning circles this is a much respected designation that is only obtained after at least three years of experience. There is a strict code of ethics, and a rigorous exam must be passed to earn the title. These professionals are capable of offering financial advice on a broad range of issues

• Chartered Financial Consultant (ChFC) – Professionals who use this designation are typically found in the insurance sector but they are also capable of handling some financial planning aspects because they have completed additional education in investments and economics

• Chartered Retirement Planning Counselor (CRPC) – This designation is awarded via the College of Financial Planning and it allows these professionals to specialize in matters of retirement planning.

There are 50+ such professional certifications that can be achieved, but those listed above are some of the most common. These designations will very helpful in helping you to find a financial advisor who is best suited to address your planning requirements.

4Interview the Prospects

After having narrowed down your list of prospects using steps 1-3 above you should have a short list of potential financial advisors. Your next step is to meet with each one of them. Typically, credible financial planners will not charge you anything for an introductory meeting. Such meetings are crucial and beneficial to both parties. You will get to explain what you need and ask any questions you have, and the financial advisor will be able to make an assessment of whether he or she is a good fit for your job.

5Establish a Payment Structure

The next step in your search to find a financial advisor is to know how each one of them prefers to be paid. Each person has different compensation preferences. The common types of compensation are:

• Commission – This is typically the most common form of compensation. It means that upon your purchase of an investment, a designated percentage of the total investment cost will be deducted and be given to the financial advisor.

• Flat fees – Flat fees may be charged as a flat by-the-hour rate or as a flat payment after a comprehensive financial plan has been structured for you.

• Fee based on assets – This is not as common as the first two but it’s now gaining in popularity. You can now find a financial advisor who will charge you an annual fee based on a percentage of the assets you have invested with him or her.

• You may also find a great financial advisor who use a combination of these three approaches

6Make Sure You’re Comfortable

After all these prerequisites have been successfully achieved and you have arrived at a decision on who your financial advisor will be, you need to create a relaxed atmosphere for both of you. The financial advisor will certainly need to know more about you and your financial situation. You must be willing and comfortable to share these details. Not doing so will result in poor decisions being made about your finances.

In your search to find a financial adviser you should look for someone dependable and one who you know is not merely after your money. The right professional is one who is honestly supportive of your ambition to grow your wealth, and will be accountable if your portfolio does perform as expected.

What Do You Think?

Do you have any additional tips for finding a financial advisor?