What is a Financial Planner?
These days, it seems like everyone fancies him or herself as a "'financial planner.'" In reality, a so-called "planner' may actually be a broker, insurance agent, an accountant, or even an attorney who has usurped a title. Unfortunately, these folks may not always have your best interests in mind.
This is precisely why it is best to find a method of picking the right person so that you can prevent your money from going nowhere; or worse, disappearing.
"Just because someone tells you he is a financial planner doesn't mean that they really are, or that they follow any type of process or guidelines designed to benefit you and your investments," says Matthew Everson, owner of MJ Everson Financial in Santa Rosa.
Here are some steps you can take in choosing a financial planner that will help ensure your best interests and investments are protected:
- Narrow down your prospective planners. Ask those you trust who they have used and if they feel confident in that planner's ability.
- Ask about a free initial meeting. Any person who pressures or rushes you to make a decision is a red flag. A good planner will give you the time to evaluate a proposal and allow you to decide whether it is right for you.
- Check out their credentials. There are many organizations and designations that denote one thing or another about a person's background. In the end, the planner should be licensed, free of criminal background and independent of conflicts that may jeopardize your best interests.
- Find out if the planner is a captive agent. This means that they work for a firm which only allows him or her to present you with that firm's available products. This setup prevents the planner from being able to build a proposal around your specific needs. It would be like shopping at a grocery store that only sells you one brand of milk, one brand of cookies, one brand of eggs, etc. You don't accept that in the rest of your life; you shouldn't accept it for your money, either.
- Other qualifications to look for include experience in the field, specialization in senior needs, retirement plans, educational funding or other areas. It can be helpful to ask what the adviser's typical client has in assets and financial needs.
Don't automatically weed out a planner because he is fee-only, or just because that person accepts commissions. A commission-paid planner can accept people with lower assets to invest and can also provide a better base of products to choose from, assuming he or she is independent. A planner should have no problem telling you how he or she is compensated and how much that compensation affects your investments over time. There are positives and negatives to both types of compensation (fee and commissions), so do the numbers and see which scenario works best for you.
We feel very confident in stating that our company meets and surpasses these standards. Come in for a free one-hour visit to evaluate if MJ Everson Financial can meet your needs.
Investors should carefully consider the investment objectives, risks, charges and expenses before investing. Obtain a prospectus and other important information pertaining to investment products from your registered representative. Read all prospectus and other important information carefully and before investing. Investing involves risk. Principal and investment return will fluctuate and may lose value.