Choosing a Financial Planner

Financial planners help clients achieve financial goals by providing advice on how best to save, invest, and grow assets. Anyone can hang out a shingle as a financial advisor, but that does not make them an expert. Don’t confuse a financial planner with a stockbroker, who is usually contacted for advice on trading an individual stock. Financial planners also differ from accountants that focus on lowering taxes, insurance agents who might lure you into an expensive life insurance policy, or the local mutual fund rep trying to sell you mutual funds. Although a good financial planner may have an extensive network of all these professionals, they act as their client’s CEO to bring together aspects of personal finance to help achieve financial goals.

Do I Need a Financial Planner?

You can certainly try to manage your money and achieve financial goals on your own. However, you could also try to refinish your basement or fix your car on your own. It seems like a great idea for some and a very flawed plan for many, many others. Mastering personal finance takes many hours of research, learning, time, and money.  You can ask yourself if you have the technology, knowledge, emotional awareness, and time to be successful.  For most individuals with busy lives, it is not worth the time and ongoing effort. As you get older, busier, and more wealth, your financial goals and options get more complicated. A financial advisor also helps you remain more disciplined and focused. They will take the emotion out of investing and help you remain on track so there is no procrastinating while saving for financial goals. It may sound crazy to give an advisor 1% of your annual assets to manage them, but you get an abundance of advice about almost anything related to personal finance. The price becomes sensible when you consider that you’re paying to establish a comfortable retirement, save for your child’s college or choose the right mortgage when borrowing hundreds of thousands of dollars.  Simply put, the stakes are just too high to fail.

Certified Financial Planner ®

As I indicated earlier in the article, anyone can call themselves a financial advisor. With hundreds of certifications, they may also have an alphabet soup behind their name. However, CFP® (Certified Financial Planner) is the most significant credential. A CFP® has passed a rigorous series of tests followed by a comprehensive final exam that nearly 50% of prospective CFPs fail. A CFP® must also have a college degree at an accredited university with at least 3 years of direct financial planning experience. Certified Financial Planners must commit to continuing education including ethics classes. Although a CFP® is not a failsafe method to pick an advisor, it is a good start.

Method of Payment

You typically want to avoid commission-based advisers. Planners who work on commission may have less than altruistic incentives to push a certain life insurance package or mutual fund if they’re getting a cut of that revenue. A fee-only advisor charges a fee based on assets under management. Typically, this fee is between .5% and 1.5% based on assets-under-management. A fee-only advisor makes more money as their clients assets grow. Therefore, their goals are in line with their clients. This eliminates the conflict of interest when choosing investments and products.


A fiduciary is required to act in their client’s best interest. An advisor that has registered with their state or the Securities and Exchange Commission as a Registered Investment Advisor has pledged to be a fiduciary for their clients. Broker dealers and registered representatives must find suitable investments, but are not held to the high standards of a Registered Investment Advisor.

Beware of Market Beating Claims

Warren Buffet outperforms the market averages and very few others honestly have – but Warren Buffet also has billions of dollars to make investments ordinary investors cannot make. Bernie Madoff claimed to and the rest is history. If you have an initial meeting with an adviser and you hear predictions of market-beating performance, get up and walk away. No one can safely make such guarantees, and anyone who’s trying may be taking risks that you don’t want to take.  Asking someone whether they’ll beat the market is a pretty good litmus test for whether you want to work with them. What they should be promising is good advice across a range of issues, not just investments. And inside your portfolio, they should be asking you about how many risks you want to take, how long your time horizon is and bragging about their ability to help you achieve your goals while keeping you from losing your shirt when the economy or the markets sag.

Run a Background Check

Ask your advisor if they have ever been convicted of a felony or under investigation by a financial regulatory agency. You can also go to to see if their CFP designation is up to date.


Make sure your potential advisor has ample experience to handle your needs. In this economy, many individuals in industry are trying to reinvent themselves and turn to the financial advising field. Look for an advisor with at least 10 years of industry experience.


As the New Year starts, many investors resolve to get their finances in order. Finding a good financial advisor is a great start.


Kevin McNab

This article is written by Kevin J. McNab. Kevin is President of ACE Wealth Partners, LLC and is a CFP®, ChFC®, and CRPC®. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views expressed in this blog post are as of the date of the posting, and are subject to change based on market and other conditions. This blog contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this blog post should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax or legal advice. If you would like investment, accounting, tax or legal advice, you should consult with your own financial advisors, accountants, or attorneys regarding your individual circumstances and needs. No advice may be rendered by ACE Wealth Partners, LLC unless a client service agreement is in place. If you have any questions regarding this Blog Post, please Contact Us. Please read our website DISCLOSURE carefully for additional information.