You no longer have to worry about the many different people and places eager to give your their spin (excluding this site, of course!).
This is a very broad category, and can cover many different backgrounds, certifications, and degrees.
You've probably heard of a few: MBA, JD, CPA, CFP. But what about an "Accredited Financial Counselor", or a "Chartered Financial Consultant"? You've probably never heard of either of them, let alone know the differences between the two. How can anyone know who is the "right" choice?
Fear not...read on.
"Commission-Based" advisors are compensated by a percentage of the amount you choose to spend or size of the portfolio they manage. There are potential conflicts of interest because they make money when you buy something, regardless of whether or not it is a good “fit” for your situation.
A second consideration is that fee-only advisors put your interests ahead of their own, while those that are commission-based have a legal responsibility to represent their employer first.
NAPFA is an American trade organization, created for fee-only advisors. There mission, as stated on their website, is:
In order to be a member of NAPFA, personal financial advisors and investment specialists must meet a strict set of professional standards. This is done through the process of peer reviews for a potential candidate’s work (e.g. comprehensive financial plan for a client).
The plan must cover the common needs of many individuals and families, including:
NOTE: You can start improving your financial future right now by clicking on the links next to each bullet point. Save time by preparing before a meeting, so you can spend time on specific questions rather than rehashing your basic info!
As you can guess, these strict criteria keeps membership small (~2400 members). But these standards work in your favor.
NAPFA members have a reputation for excellence and integrity, which is hard to come by, as seen during the 2008 financial crisis.
The site has a simple interface for you to use in your search.
The National Association of Personal Financial Advisors Website
After entering your home town or zip code, a list of local NAPFA members will appear. You can also search for a specific advisor to see if he or she is listed.
Along with a phone number, the results include a map of the address, a short description for the advisor, a link to the advisor's website, and email address if available.
NAPFA Search Results - Detroit, Mi
The "Refine Results" option is the best feature of the site. By following the link, you can select the specific specialties you need, including:
Refining Your Search Results
For example, you've done everything you can with this site, and now you have specific questions about tax planning. It is time to seek out some advice.
Or, you're just getting started, you really like the topics on the site, but are not sure how to begin because of some "special" circumstances. Having someone provide you with advice may be the added reassurance you need.
It is also appropriate to seek out financial investment advice when you realize the importance of taking control of your finances, but are wise enough to realize that you cannot take care of them yourself.
Keep an eye out for "hidden" fees and any payment quoted in percentages. 1% or 2% does not seem like a lot, but as your account grows, the annual commission you're charged also increases.