Such questions may lead you to seek the advice of a financial professional. But which type of financial professional do you want? 

In general, most folks reach out to a financial professional for help with creating a financial plan and/or investment management. 

Creating a financial plan is like creating a roadmap for your financial situation: Where are you now? Where do you want to go? How would you like to get there? When do you want to get there? What would you like to use to get there? 

If a financial plan is like a roadmap, investment management is one method used to answer the when, what, and how questions: When do you want to get there? (Time horizon) How do you want to get there? (Risk tolerance) What do you want to use to get there? (Financial solutions like securities and/or insurance products) 

At this point, the questions to ask yourself are these: 

• Do I want a financial plan for navigating my financial situation? 
• Do I want help with managing my investments? 
• Do I want both?

After you determine why you might want to work with a financial professional, you need to consider whether you want to work with a financial planner or financial advisor. 

Financial planners and financial advisors are financial professionals who help consumers manage their money. A financial planner is compensated by the consumer based on the financial plan created. A financial advisor is often compensated on the amount of investable assets they manage. Neither term is mutually exclusive because sometimes a financial planner may help consumers manage their investments and sometimes a financial advisor may help consumers create financial plans.

If you google financial professional, you will discover a veritable alphabet soup of financial professional titles. Insurance salespeople, registered representatives, and investment adviser representatives may go by a variety of job titles: financial representative, financial advisor, and financial planner are just a few. Knowing how financial professionals get paid and how this may impact the advice they give you may help you to recognize which type of financial professional you prefer. Financial professionals may be compensated in the form of salary, commission, trailing commission, a percentage of the assets they manage (also known as fee-based), or fee-only. How may this impact the advice they give you? 

If a financial professional’s pay is commission-based, she or he may be incentivized by bonuses or vacations to recommend one product over another. If a financial professional’s pay is based on the percentage of assets they manage (fee-based), she or he may only be able to do business with clients who have a specific amount of investable assets. (Since their livelihood is tied to the amount of assets they manage, they may be unable to help people whose investable assets fall below a specific threshold because they cannot offer guidance on assets they do not directly manage.) If a financial professional’s pay is fee-only, she or he is paid directly by you and does not receive a financial incentive to recommend one product over another to you.

Who is qualified to give you financial advice? Some financial professionals have passed rigorous examinations in order to offer you advice. In addition, some are required to act in your best interests, and some are fiduciaries who must place your interests above their own. To work with a financial professional who meets any of these standards, do your research by taking the time to look up the names of financial professionals using the resources below. Learn about their professional backgrounds and discover whether there are any disclosures associated with their records. 

After you have identified why you want to work with a financial professional and researched which type of financial professional you may prefer, take the time to interview them.

Notice the nuances of the first few interactions. Determine whether she or he does business in a way that is comfortable to you. What are the office hours? Is the office brick-and-mortar or virtual? How does she or he meet with people? In-person, virtually, via phone? Is there flexibility in the meeting schedule? Is she or he willing to meet you when and how you need? Easily accessible (returns calls, emails, and text messages promptly)? Ask whether you will work with the financial professional directly or the expectation is for you to work with the office assistant? Is it easy to talk with this person? What is your gut feeling telling you? Remember that you are looking for someone whom you trust, and it is important that you feel a level of comfort with this person. If you don’t feel comfortable, make a note and move on to the next interview. Tell the person you are interviewing other financial professionals you will be in touch if you want to move forward.

When interviewing financial professionals, ask:

• How are you paid? Tell me about your compensation structure. Are you required to communicate conflicts of interest to me? Are you required to act in my best interests? Are you a fiduciary? 
• Are you required to manage my money before you advise me? Is there a minimum amount of money I need to have to work with you? Is the expectation that you manage my investments, or may I manage my investments on my own?
• How do I pay you for advice? Will you create a financial plan for me without managing my investments? Will you talk through my financial plan in a way that will help me to understand what I need to do to improve my financial situation? How much will that cost? (Note: Some financial professionals will tell you that they will create a plan for you at no charge as a sales tactic for collecting information about your financial situation. Some financial professionals will charge a fee to create a financial plan for you but not require investment management. Decide which approach you prefer.)
• Tell me about your process. How do you help people? What types of solutions are available to you? (Insurance policies only, insurance policies and investment products, financial planning tools, etc.) Why might you recommend one product (whether an insurance policy or an investment portfolio) over another to me? 

When it comes to choosing a financial professional, there is no wrong answer. However, you should be aware that not all financial professionals are the same. Identifying your reason for connecting with a financial professional, learning about the different types of financial professionals, and using available resources to conduct your own research may help you to identify the one who may be right for you.

Resources to consult include:

• National Association of Insurance Commissioners (NAIC) https://sbs.naic.org/solar-external-lookup/
• Financial Industry Regulatory Authority (FINRA)  www.finra.com/brokercheck
• US Securities and Exchange Commission (SEC) https://www.sec.gov/check-your-investment-professional and https://adviserinfo.sec.gov/
• North American Securities Administrators Association (NASAA) https://www.nasaa.org/industry-resources/investment-advisers/investment-adviser-guide/
• SEC-NASAA Investor Bulletin: Making Sense of Financial Professional Titles, https://www.sec.gov/files/ib_making_sense.pdf
• Certified Financial Planner Board  https://www.letsmakeaplan.org/  and https://www.letsmakeaplan.org/how-to-choose-a-planner/why-choose-a-cfp-professional
• National Association of Personal Financial Advisors (NAPFA) https://www.napfa.org/financial-planning/consumer-resources and https://www.napfa.org/find-an-advisor

Financial Planner Association https://www.plannersearch.org/

Wendolyn Forbes is a CERTIFIED FINANCIAL PLANNER™ with Wealth Transition Finance, A Member of Advisory Services Network, LLC, where she offers financial planning and investment management services for either a one-time or on-going cost. Wendolyn is a fee-only financial planner and member of the National Association of Personal Financial Advisors (NAPFA). For more information about Wendolyn’s financial services practice, please visit her website at www.wtf-asn.com.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

This material is provided as a courtesy and for educational purposes only.  Please consult your investment professional, legal or tax advisor for specific information pertaining to your situation.