What kind of financial planner

Hire the wrong financial planner, and you could end up spending your golden years struggling to scrape by. There are a lot of factors to consider when comparing planners, but the first consideration should be the certifications they hold. A prestigious certification doesn't guarantee that a planner is at the top of their field, but it does mean they've proven their expertise in at least one aspect of financial planning.

Thus, knowing what the different certifications mean can help you narrow down your options to planners who specialize in topics that are relevant to you.

Many investors assume that any professionals who refer to themselves as "financial planners" have received some kind of certification. Unfortunately, there's no rule governing who can go by the title of financial planner; anyone can set up shop using that title, whether or not they know anything about finance or have any experience. You're better off sticking with financial planners who have an actual certification by a governing agency, be it state or federal.

A registered representative, also known as a stockbroker, is a salesperson working for a broker-dealer. A certified registered representative is required to register with FINRA the Financial Industry Regulatory Authority and is licensed by the state's securities regulator. Stockbrokers are not generally the best financial planner, because their job is to sell you products, not to advise you.

Most registered representatives are paid commissions based on what and how much they sell. That means they have an inherent conflict of interest between recommending the best product for your needs and recommending the product that would make them the highest commissions. These financial planners are in the business of providing advice about securities but not usually other types of investments to their clients. Some advisors work only with certain types of clients, such as professional athletes or business owners.

Do you need help getting through a unique circumstance? Some advisors focus on particular life situations, including family planning, divorce, starting a business or legacy planning. You should also consider how much money you have. Minimums vary from advisor to advisor. Some may work with you if you have just a few thousand dollars or less. Another simple way to find financial advisor options near you is to use a matching service.

Start by thinking about your financial situation and goals. Advisors sometimes specialize to become experts in one or two aspects of personal finance, such as taxes or estate planning.

At the same time, many advisors are generalists with working knowledge of multiple areas of personal finance. If, however, your needs are restricted to basic investing help and portfolio creation, you might be able to skip human advisors and their fees and go with a robo-advisor instead.

A stockbroker whose main job is usually to sell products, rather than advise clients. Specialize in advice on securities and investments. Once registered, known as registered investment advisors RIAs. Certified financial planner CFP. Experts in many areas of financial planning taxes, retirement planning, estate planning, insurance, etc.

Certified public accountant CPA. Personal financial specialist PFS. Federally-authorized with a technical expertise in taxes. Common at tax-filing agencies. Chartered mutual fund counselor CMFC. To earn the CFP certification financial advisors must:.

Agree to complete 30 hours of CFP Board-approved continuing education courses over a specified reporting period, to keep up to date with developments in the financial planning field. Financial advisors who serve individuals and families make up the majority of financial advisors, and they fall into three categories: investment advisors, Certified Financial Planner CFP professionals, and Registered Representatives RRs , previously known as stock brokers.

Their formal name is Registered Representative RR. Unlike investment advisors, brokers are not paid directly by clients, instead, they earn commissions for trading stocks and bonds, and for selling mutual funds and other products. Like the term financial advisor, financial consultant and wealth manager are both generic job titles that do not require licenses or certifications. In the past, financial consultant was often used by brokers who offered financial-planning services.

The U. But other titles and forms of advice are largely unregulated, and that puts the responsibility on the investor to know what to look for.

Here are some guidelines:. Titles may mean nothing. Some of the most common titles advisors use — including the term "financial advisor" itself — aren't tied to any specific credentials. Know what kind of advice you need. Identifying what you want from an advisor can go a long way in finding the right fit for you. For example, if you need help with taxes, you should look for an advisor who specializes in tax work and has a certification to match.

If you only want investment management, a low-cost service like a robo-advisor might be the best fit. Learn more about how to choose a financial advisor. Find a fee-only fiduciary. We recommend that you always work with a licensed, registered fiduciary — preferably one who is fee-only , which means the advisor is paid directly by you and not through commissions for selling certain investment or insurance products.

Vet your advisor. We've included resources for doing that below. Looking for an advisor? Jump to details about online financial planning services with access to CFPs or robo-advisors.