What to look for in both


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The terms “financial advisor” and “financial planner” are often used interchangeably in the world of personal finance. But although both professional titles involve someone guiding your financial decisions, there is a slight difference between the two. Knowing this contrast can help you better decide which one to hire in certain circumstances.

In short, a financial advisor tends to help clients with more specific and immediate financial questions. They may specialize in retirement, investments, taxes or estate planning. A financial planner, on the other hand, can be defined more simply as someone who provides lifelong financial planning to clients and helps them get an overview of their finances as a whole.

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What to Look for in a Financial Advisor and Planner

Although there is a slight difference between the goals of a financial advisor and those of a financial planner, they share similarities when it comes to what to look for when hiring. The main thing to note is the credentials of your prospective advisor or planner.

Because really anyone can claim to be a financial advisor or planner, experts in the financial services industry are urging consumers to seek out those with official designations and avoid those who are unqualified. Having an official designation means that the person has passed certain exams or met specific thresholds of education and work experience. A counselor or planner who does not have these credentials may therefore have skipped exams and training.

According to Skip Schweiss, former president of the Financial Planning Association, finding someone with the proper financial license is a lot like finding someone to help you when you’re sick and need help with your body.® (AFP®), a membership organization for certified financial planners. Schweiss urges people to find the “most qualified” counselors and planners, just as they would seek out a “top-notch doctor.” He adds that “consumers should know if they are getting a real financial planner.”

Skills to look for

So how do you know if a financial advisor or planner is “real?” One with credentials can hold several licenses and designations, and the most common is Certified Financial Planner™ (CFP®). “A lot of people see the CFP as the gold standard,” says Schweiss. “A lot of advisors say it gives them more credibility with clients.”

Other licenses to look for include Chartered Financial Analyst (CFA®), Chartered Financial Consultant® (ChFC®) and Certified Investment Management Analyst® (CIMA®). Stephanie Mackara, Senior Wealth Advisor at Charleston Investment Advisors, would also add a Registered Investment Advisor (RIA) to this list, as they are obligated to provide advice to investors that is “uniquely aligned with the financial goals and needs of the investor.” ‘investor,’ Mackara said.

Tips for Finding Accredited Financial Advisors or Planners

There are several free resources online to verify an individual’s professional financial qualifications, experience, education, and disciplinary history. Here are a few:

There are also tools that do the homework for you. For example, Zoe Financial matches clients with pre-approved financial advisors with CFP, CFA, or CPA (Certified Public Accountant) designations. Its advisors typically charge an annual rate of between 0.5% and 1.5% of a client’s assets under management.

If you want to find an advisor with hourly rates, Garrett Planning Network finds you financial advisors and planners in your zip code who charge by the hour.

Note that the rates for hiring financial advisors or planners vary depending on several factors, including the form of compensation and whether they will be offering their services on an ongoing basis.

If you’re not yet ready to pay for a financial planner or advisor, but want to start getting your finances in order, you might consider using inexpensive or free tools like a robo-advisor. , which creates and manages a personalized investment portfolio. based on your goals and risk tolerance, or a budgeting app, which tracks your income and expenses and can help you create a budget. Select Betterment ranked as the best robo-advisor and Mint as the best free budgeting app.


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Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.


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