It's a sad fact of the industry
by 89Swine (2019-03-18 14:14:23)
Edited on 2019-03-18 14:42:51

In reply to: Choosing a financial planner.  posted by JWIrish

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that most people who call themselves "financial planner" or "financial advisor" don't do any planning and render very little valuable advice. Most of the people with those titles are financial salespeople masquerading as planners or advisors. Sort of like the pharmaceutical rep posing as a doctor.

So it's largely up to each individual to try and navigate these shark infested waters to find a true financial advocate. Here's some basic information to point you in the right direction:

1. Narrow your search by focusing only on Certified Financial Planners. The CFP designation represents the highest level of competency in the financial planning profession. Only about 20% of people who call themselves financial advisors are a CFP. You can search for CFPs in your area at cfp.net

2. Then look for those who work for an independent Register Investment Advisor (RIA). An RIA is a legal entity that is regulated by the Securities and Exchange Commission. RIA employees are legally held to a fiduciary standard to put their clients' interest first. This is the highest legal standard in the profession. You can verify a firm's registration and learn about its operational practices at sec.gov.

3. Generally speaking, avoid brokerage houses, banks, insurance companies, and Ameriprise. While you might find someone good, the odds are stacked against you. These firms are designed for product sales and profit maximization. Their employees are measured largely on how much revenue they produce for their employer, not the quality of their advice.

4. Another good place to search for financial planners in your area who meet this criteria is the national Financial Planning Association. Go to plannersearch.org.

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