Here are the steps that will help you avoid problems when choosing a financial advisor:
 Find out what the letters mean:
AFC – Accredited Financial Counselor
CFP® – Certified Financial Planner™
CPA – Certified Public Account
CFA – Chartered Financial Analyst
ChFC – Chartered Financial Consultant
CLU – Chartered Life Underwriter
PFS – Personal Financial Specialist
RIA – Registered Investment Advisor
RR – Registered Representative
(Stockbroker)
Make a review of your financial situation
First of all, gather your financial records and review your personal and financial situation. Take some time to think about what you want to achieve and decide what kind of help you need. Define the kind of advisor you want will help narrow your search and determine how much you pay. If you have no idea what you need, perhaps your first step is to have someone help you get a picture of your spending patterns, assets, insurance, income, and short- and long-term goals. Bring along financial documents.
In the initial meeting the advisor will want to get a picture of your financial situation. Speed this process along by bringing the information with you. The advisor you choose will need this documentation anyway, and if you provide it up front in writing, there’ll be more time for you to ask the questions you’d like answered. You should bring: a rough plan of your monthly budget including an estimate of monthly expenses, recent tax returns, Social Security estimates, sources of present and future income, recent account statements for retirement plans, recent bank and brokerage statements for all accounts, a list of major assets and estimated market value, a recent statement from all open credit card accounts, and a copy of the latest declarations page from auto, home/renter’s, life, and disability insurance.
Develop a list
Once you’ve established what you’re looking for, you can begin your search. You’ll need to develop a list of prospects. You may get recommendations from friends, relatives, or work colleagues, or from other financial professionals, such as your accountant. You can request a referral from a financial planning organization – many have listings on the Internet of affiliated planners in your area – or just look in the yellow pages. Start by phoning the financial planners on your list and ask them to send you a copy of their Financial Services Guide (FSG). If they do not send you an FSG or if they try to sell you products at this stage, eliminate them from your list. Once you’re happy with the professionalism, frankness and range of services of every financial planner left on your list, you are ready to set up introductory meetings.
Remember, expel anyone:
• who does not have a license or written authority to represent a license holder
• who does not provide you with an FSG
• whose FSG does not include details on how they handle customer complaints
• who does not have professional indemnity insurance
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