Financial planners not just for the wealthy

It's not uncommon to feel overwhelmed by the sheer number of important decisions we need to make concerning retirement accounts, investments, college savings and other complicated financial issues. That's one reason more and more people turn to professional financial advisors to help them navigate an increasingly complex economic world. And it's not just the wealthy who require these services; many middle-class families are turning to outside financial advice as well.

Some people simply require a one-time, objective opinion about whether their current financial plan will meet their future needs, whether for saving for retirement, buying a home or building a sufficient emergency fund. Others haven't even started a plan and don't know where to begin.

Here are a few suggestions for finding the right financial advisor:

When searching for a financial advisor, look for someone well-qualified in their field, whose ethics and professional behavior are above reproach and with whom you can be comfortable discussing intimate financial details. Seek someone who asks probing questions, listens to your needs and concerns, won't try to sell you unneeded products or services, and can explain in plain English the potential risks and rewards of every recommended action.

Ask for referrals from trusted friends, relatives, coworkers and professionals like accountants and lawyers. Find out what factors they used to choose their financial planners and how satisfied they are with the results.

Interview at least three candidates. Most professionals will provide a free or low-cost initial consultation and may ask you to fill out a detailed questionnaire beforehand to help guide the discussion. And be prepared with your own questions, including:

• Work experience – how long practicing, types of clients, areas of specialization, etc.
• Qualifications, including education, licenses, credentials and other certifications.
• Fee structure – are they paid an hourly rate, a flat fee per task, by commission, or a combination of fees and commissions.
• Services and products offered – some people believe it's a conflict of interest for advisors to earn commissions for products they recommend, so ask for full disclosure if they aren't "fee-only."
• References from current and past clients.
• For additional questions to ask, visit the Securities and Exchange Commission (www.sec.gov/investor/brokers.htm) and the Certified Financial Planner Board of Standards (www.cfp.net).

Many types of professionals call themselves financial planners, but training and specialization vary widely – some are essentially salespeople. Common designations include: Certified Financial Planner, Certified Financial Consultant, Certified Public Accountant/Personal Financial Specialist and NAPFA-Registered Financial Advisor, but the list goes on.

Most groups that certify financial planners have their own credentialing requirements, regulators and ethical guidelines, but education and experience requirements vary. Good resources for learning more about the different types of financial planners, as well as locating local professionals, include the Financial Planning Association (www.fpanet.org), the National Association of Personal Financial Advisors (www.napfa.org), and the Certified Financial Planner Board of Standards (www.cfp.net).

Before hiring a financial advisor, investigate his or her background and disciplinary history, as well as that of their firm. The CFP Board of Standards provides links to the appropriate regulatory agencies (www.cfp.net/).

Many considerations come into play when hiring a financial planner, but it's worth the effort. You wouldn't entrust your health to a doctor in whom you don't have complete confidence, and the same should apply to the expert giving advice on handling your hard-earned money.