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Before you hire a financial planner, you should conduct an interview and ask a lot of questions so you can determine whether he or she will be able to effectively handle your accounts. It is important to ask about the type, length and breath of experienced possessed by any prospective financial planner. You will want to know how many years they have been active in the industry. It will also be necessary to learn which firms for which they have worked. You may wish to have the prospective planner articulate some of his or her previous experiences in the field, and what types of things they learned and how they will apply that knowledge to new clients. Should you be seeking a planner who will provide investment guidance, you may wish to find a professional who has experience in navigating clients through economic downturns. You should inquire as to the prospective planner's credentials. It is important to realize that the title "financial planner" is broadly applied to many different types of industry professionals. It is wise to ask any potential consultant what they believe qualifies them to provide sound financial planning insight. You may wish to secure proof of professional certifications including that of Certified Financial Planner or Chartered Financial Analyst. Possession of these types of credentials is evidence of long term commitment to the financial services industry and the knowledge necessary to pass certification testing. Another useful question to ask is what types of continuing education the planner intends to pursue in order to stay abreast of industry trends and changes. All potential clients should ask about the type and breadth of services that the financial planner is able to provide. The type of available services is likely to be determined by things such as the credentials and licenses obtained, as well as the financial planner's background and work experience. Those shopping for advisory professionals need to be aware of the fact that unless they possess the correct licensing and state and federal registration, financial planners are precluded from selling insurance products and securities including mutual funds and stocks. It is possible to encounter financial planners who do not possess the proper licensing to offer securities and insurance products for sale, though they do provide advisory services in the financial field. There are other planners who focus their advisory activities primarily on narrower areas such as taxation or estate planning.

It is important to know whether a prospective planner has close ties to promoters of financial products. Such promoters encompass stock brokerages, insurance carriers and financial institutions. You need to know the kinds of clients and circumstances any potential adviser typically prefers. It is useful to learn whether they adopt a unified approach, crafting a comprehensive plan aimed at achieving a wide range of client objectives, or whether they are narrower in their expertise. A critical element when it comes to determining whether you have found a good fit is whether you and the planner have a shared investment philosophy. You should establish the fees each candidate would expect. The planner's fees will be determined by your needs but they should provide you with an estimate of potential costs based on the work you will be requiring. The potential fees would include the planner's hourly rates, flat fees and any percentage they would expect in the form of commission on any products you purchase as part of their planning recommendations. Licensing and credentials are a vital consideration when choosing a planner. It is not uncommon for financial planning professionals to render opinions and advice on securities products even though they do not possess the proper licensing to do so. Certain states may have no licensing requirements for such work, but in all cases, it is important to know if a financial planner possesses all relevant credentials for the work he or she undertakes. Licensing involves rigorous exams and continuing education requirements which must be met in order to maintain the appropriate credentials. It is important to be cautious and aware of the fact that licensed planners may really be nothing more than salespeople wearing the disguise of planner or adviser.

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Tags: Finance, Financial Planner, personal finance