Choosing a Financial Planner
By Elaine S. Povich
June/July 2006
Here are some points to consider:
Get suggestions from people you trust. But “check out the planner’s background yourself,” says AARP’s Sally Hurme, “even if it’s your minister making the recommendation.”
Ask about fees. A fee-only planner may charge a percentage of assets (typically 1 percent); a flat rate per project, say, $600 for college planning; or an hourly rate of about $100 to $300. Comprehensive plans can run $500 to $2,000. Some planners also sell financial products. Ask for full disclosure upfront so that you won’t be subject to influence. “That’s how people wind up with expensive products, which pay the planners high commissions,” says financial columnist Jane Bryant Quinn.
A certified financial planner (CFP) has passed a comprehensive exam and stays current with regulations. However, planners are not required to be certified.
To find a planner, contact the Financial Planning Association at 800-647-6340 or the National Association of Personal Financial Advisors at 800-366-2732.
Check out the AARP Bulletin web-exclusive questionnaire that you can give to brokers, advisers, or others in the investment business to help you evaluate whether you can entrust your money to the person who fills it out.
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