If you really need planner, look for a CFP

Almost anyone can call themselves a financial planner. But in many cases their actual expertise is narrow.

Q At 50 I'm now thinking it would be a good time to have a second set of eyes review my investments, strategy and retirement plans. Is there a shortcut to finding a good financial planner? I'm sure with lots of research, calling and interviewing, I could find someone pretty good. But frankly I'd really just like to get a list of recognized, respected, really good financial planners and set up an appointment. I'm not looking for the one "best" guy out there, but I am looking for someone with seasoned experience.


A As readers of this column know, I usually argue against working with a financial planner for most people. But the expertise of a planner can be invaluable at major transition points, such as retirement. So I like your idea.

You've also touched on a big problem in the industry: Almost anyone can call themselves a financial planner. But in many cases their actual expertise is narrow. For example, the planner may be a stockbroker without any real knowledge about retirement withdrawal rate options and long-term care insurance. Another planner may be well schooled in insurance products but doesn't have much insight into asset allocation strategies and home equity financing.

It's one reason why I tend to like fee-only certified financial planners (CFPs). They have the education and the knowledge to deal with all aspects of household finances. There simply aren't as many conflicts of interest with a fee, either. Problem is, this kind of advice is expensive. The planners mostly work with high-net-worth households.

What should you be looking for in a planner? The first set of questions involve what do you want from the financial planner? What type of person will you feel most comfortable discussing issues of money and desires?

I like this question from Ross Levin, a certified financial planner and head of Accredited Investors Inc.: "What would have changed in one year with your financial life if you were working successfully with a planner?"

I would ask planners to clearly lay out what they can and cannot do for you. In other words, what kind of planning do they do? How often can you talk? What should you expect? You want to know how the planner makes money. And yes, you want an experienced planner.

The main website for delving into fee-only financial planners is the National Association of Personal Financial Advisors at www.napfa.org. Most of the planners concentrate on well-heeled clients, but some will work by the hour. I would check out the fee-only planners at the Garrett Planning Network (www.garrettplanningnetwork.com). The planners target middle-income households. Another fee-only network is offered by advisers associated with the Alliance of Cambridge Advisors (www.acaplanners.org/index.aspx). Good luck.

Chris Farrell is economics editor for American Public Media's "Marketplace Money." Send questions to cfarrell@mpr.org.

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