ISSUE #19
Finding a Financial Adviser

One of your most important decisions is selecting a financial adviser. A good financial adviser can work with you to develop a financial plan that meets your needs and goals. However, not all financial advisers are competent and ethical. Finding the right one takes some effort and careful analysis. Here are some points to keep in mind:

1. Professional Designations -- While professional designations do not guarantee competence, they do point you in the right direction. Advisers with the Certified Financial Planner (CFP) designation must fulfill educational and experience requirements and pass a comprehensive examination. You can obtain a list of CFP licensees in your area from the CFP Board (www.cfp.net). The PFS and ChFC designations carry similar requirements. Be wary of designations that look unfamiliar, as some are sold with few qualifications.

2. Scope of Work -- Make sure you know what level of service you need. Some financial advisers provide comprehensive financial planning, while others merely sell investments. Before you consider working with an adviser, make sure you have a discussion about your needs and what services the adviser can provide. Sometimes, even an adviser with the CFP designation does not provide full financial planning services.

3. Compensation -- You need to know how your financial adviser is paid. Many advisers are paid by commissions for selling financial products. They get paid only if you buy something from them. Others are “fee-only” planners who do not accept commissions. Instead, they may charge an hourly fee, a flat fee for a financial plan, or a fee based on the value of your investments. Some advisers, who refer to themselves as “fee-based” planners, accept both commissions and fees.

4. Regulation -- Financial advisers are regulated at the federal and state levels. An adviser who sells products will need a securities license (Series 6 or Series 7) and a state insurance license. One who accepts fees will be registered as an investment adviser at the state or federal level. You can check up on a financial adviser at the NASD website (www.nasd.com) and with your state insurance department. You should verify that an adviser’s professional record is free of any serious complaints, lawsuits or disciplinary actions. There are a surprising number of advisers who have extensive disciplinary records.

5. Finding Advisers -- There are many ways to locate a good financial adviser. You can search online at the Financial Planning Association website (www.fpanet.org), you can obtain recommendations from your attorney or accountant, and you can ask your friends and business associates. Some advisers market rather aggressively, so they may find you first through cold calling. This is not the best way to find a good adviser. A financial adviser who is already well-established professionally does not need to drum up business.

6. Your Adviser’s Firm -- While some advisers are independent or work in small firms, others work at large financial services firms, such as brokerages, banks or insurance companies. Although a large firm may offer additional services and good name recognition, these firms often provide advisers with their first jobs in the business. You may get much better service from a small firm of experienced professionals. In either case, find out who will actually work with you and handle your account.

7. Schedule an Initial Interview -- You should meet with an adviser face-to-face before making a commitment. This helps you see if you are comfortable with the adviser. You need an adviser who will listen carefully and try to understand your needs. Your adviser should take the time to answer your questions. Ask for references and give them a call. Ask to see a sample financial plan and review it carefully. Make sure you understand how the adviser is paid. Avoid any adviser who wants to do all of the talking or tries to get you to sign papers right away. Interview three or four advisers before you make a decision.

8. Remain an Active Consumer -- After you select a financial adviser, make sure you pay attention to the reports you receive. Ask questions whenever they arise. If you ever feel that your adviser has become unresponsive or inadequate for your needs, make your concerns known. Never hesitate to contact your adviser’s supervisor. Most advisers and their firms want to provide good service and will address your concerns. If not, it is time to find a new financial adviser who can meet your needs.

This publication has been prepared as an educational resource to help the reader identify areas of potential concern. The publisher is not engaged in rendering legal, accounting or other professional services. The information contained in this publication should not be acted upon without first obtaining the advice of a professional adviser. 2004 © Florida Philanthropic Advisors, LLC. Material may not be used without permission.

You may wish to access NEW information this month at: www.ashland.edu/estate and “click” on “Planned Giving” in the left hand column.

Our planned giving director, Paul Ditlevson, can be of tremendous service in helping you integrate your giving goals with your overall estate plan. He can also help you prepare to visit your attorney. You can reach Mr. Ditlevson by calling 419-289-5090 or by email to pditlevs@ashland.edu or regular mail at 401 College Avenue, Ashland, OH 44805.