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What I Wish We Had Considered When Choosing a Financial Planner

Updated on May 31, 2012
Choosing a Financial Planner
Choosing a Financial Planner | Source

We worked with a financial planner based on the recommendation of an acquaintance. In retrospect, it would have been better to have done our own research before making a final decision. Here are the areas I wish we had considered.

The financial planner we worked with was paid on commission. He only got paid if we chose one of his plans. We later found out that there are financial planners that you can pay a flat fee to for their time. The view we got from the planner we worked with was obviously biased since it was in his best interest to sell us his plan rather than explaining to us the diversity of options open to us.

The financial planner we worked with had a limited number of funds that he could show us. All we saw were the funds that his company offered. Most of the documentation that we received from the financial planner were sales pitches for the different fund options rather than detailed information about fund performance and fees. In doing our own research later, we found a greater variety of fund options and some had better performance or lower fees than what the financial planner we worked with could show us. Here again a flat fee financial planner could have told us about the variety of options open to us and given us information about what to look for in a fund.

The planner we worked with seemed to want to get us to commit to several plans after just meeting with us a couple of times. We did not fully understand all of the paperwork he gave us to sign and ended up calling him later to cancel some of the accounts we had signed up for. In retrospect we should have asked a lot more questions before we agreed to sign any paperwork and before we agreed to start putting money into any of the funds he recommended. If we had chosen a planner that we paid directly, we could have taken our time to learn about the options the planner presented to us and opened accounts on our own when we were ready.

While it would have cost us money to hire a flat fee financial planner, it would have been a better investment of our time and resources. We would have been able to learn more about all of the options open to us and would have been able to get a plan that better matches our needs.

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    • LandmarkWealth profile image

      LandmarkWealth 6 years ago from Melville NY

      Very true. My experience is from working as a Financial Planner. Although I am not a NAPFA member yet. I just haven't gotten around to joining. However I plan to shortly. There and excellent organization.

    • Moneyger profile image

      Moneyger 6 years ago

      Thanks for sharing your experience. It is important to carefully choose an adviser because bad advice can cost you as much or more than no advice at all.

    • LandmarkWealth profile image

      LandmarkWealth 6 years ago from Melville NY

      Flat fee or even better an advisor compensated on an asset based fee as there is more of an ongoing incentive to help the client while being tied to their success. www.NAPFA.org is a great resource for a fee only advisor search.

    • 910chris profile image

      910chris 6 years ago from North Carolina

      Very good advice. As you said, it is always better to fully understand all your options before you sign anything.

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