How to Find the Right Financial Planner

You may just be the best financial planner that you can find for yourself. After all, who else has more interest in your financial well-being than you. However, you may feel overwhelmed by all the options there are for you to save and invest, or you may not have the time to take care of all that is out there that can make you financially healthy. If this is the case, you may want to hire a financial planner. But now there is another scary concept. How do you find the right planner? How do you know he has your best interest at hand?

A good place to start is to ask your friends/relatives for referrals. Don't rely solely on their opinions though, as many people have different investing strategies and look for different things from their financial planners. Set up a meeting with a prospective planner to get an idea of their strategies and if they match what you are looking for. The number one thing to remember is that first impressions are very important. Would you feel comfortable discussing all your financial matters with this person. Do you think they would keep your best interests in mind? If so, then you are off to a good start.

There are a few important things for you to know/ find out about your prospective financial planner.
-You should only use fee-based planners, not those that make a commission on your every move.
-Ask about their background, how long they've been in this business and what kind of formal training they have received. Experience is important, but it is not everything.
-Ask if they recommend term life or cash-value policies. Term should be their only answer. If they begin to praise the virtues of cash-value you may want to move on. Anything other than term life is unnecessary and more expensive.
-Ask if they use index mutual funds and ETF's. You definitely want these as options in your portfolio. Not to be used exclusively, but they are good to have in the mix.
-A good question to ask is if they recommend using a home equity loan or line of credit to pay off credit card debt. The answer you are looking for is NO! With a home equity loan, your home becomes collateral for the loan...so you risk losing your home if you fall behind on your payments. On the other hand, credit card debt is unsecured-there is no collateral that the credit card company can take if you fall behind on those payments. (Don't get the impression that it's OK not to pay your credit card debt... do your best to pay something every month to keep your credit looking good.) The thing is that you can never tell when you might fall on hard times, just don't risk losing your home which is probably your most valuable asset.

I'm sure there are many more questions that you want to ask, make sure you do! Go prepared with a written list and jot down notes. Chances are that you will find someone that has most of the qualities that you want, but not all. It will all depend on what is most important to you. I would meet with a minimum of 5 financial planners. This may seem time consuming, but well worth it since it is your money that he or she will be working with. You can always speak by phone at first and narrow down your choices and then meet in person. Just make sure you take the time to have your most important questions answered.

Good Luck!