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Checklist for selecting your financial professional

Here are some questions to ask:

• What is the professional's education and experience?

• What do you expect the professional to help you with?

• What fees or other costs can you expect?

• What type of client does the professional usually service? Your money management needs may be too small or too big for this particular professional to handle properly.

• Will the professional be doing the work personally or will a junior associate be handling things?

• What's the personal investment philosophy of the professional (conservative, aggressive) and does it jibe with yours?

• Has the professional ever had any regulatory problems? Are there any now pending?

Financial Planners

Financial planners come in two varieties: Those who have special designations or degrees attesting to certain competency in the field and those who simply label themselves as planners and may or may not have any expertise in the field.

Finding a financial planner

Obviously, the best way to find a financial planner is by personal recommendation. If you don't have one, you can use the following resources for locating a planner. Check with your local Better Business Bureau or your state attorney general to see whether the planner you've found has had any complaints filed against him or her.

Resources for finding a financial planner

American Institute of Certified Public Accountants (AICPA), Member organization with a special section for those who have received the PFS designation. 888-777-7077, www.aicpa.org/index.htm

The Financial Planning Association (FPA), Member organization providing listing of financial planners with the CFP designation. 800-322-4237, www.fpanet.org

The National Association of Personal Financial Advisors (NAPFA), Member organization for fee-only financial planners. 800-366-2732, www.napfa.org

Fees

Financial planners have three types of fee structure:

• Fee-only planners charge for their time and advice regardless of your subsequent actions. The fee may be an hourly rate or a flat fee for a particular service, like creating a comprehensive financial plan. For ongoing services, you may be charged a fee based on your assets or income.

• Commission-based planners don't charge for advice but receive commissions on your investments. This arrangement seems simple, but it raises the issue of biased advice.

• Fee-plus-commission planners require you to pay a fee for the preparation of a comprehensive financial plan plus commissions on any products you buy or sell through them.