ENERGYMATTERS MONEY CENTS
By Lisa Hughes-Daniel
NRECA
Invest in research before hiring a financial planner If you’re looking for a qualified financial planner, the first investment you need to make involves time and effort. This means doing homework and testing the candidates to find a planner whose style, qualifications and ethics meet your needs. Here are some tips: Decide on the services you want. Are you looking for retirement planning? Investment guidance? Advice about insurance products? Knowing your needs can help narrow your search. Get references. Ask friends and colleagues for names of professionals they’ve worked with and trust—especially people with financial profiles similar to yours. Look online. Search the databases of reputable national organizations that require members to earn specific credentials and adhere to ethical standards. Try the National Association of Personal Financial Advisors (www.napfa.org) or the Certified Financial Planner Board of Standards (www.cfp.net). Look for credentials. The title “financial advisor/planner” doesn’t mean much—anyone can claim to be one. You want a trustworthy professional with experience in the industry, preferably someone who holds the Certified Financial Planner (CFP®) designation. This certification requires extensive testing, experience and ongoing education. CFPs also pledge to serve their clients’ best interests above all else. Do a background check. When you have identified a few candidates, request copies of their ADV Forms, Part II. Planners and advisors must file this form with the U.S. Securities and Exchange Commission, and it contains detailed information about services and fees. For a public report on any complaints or disciplinary action against a planner, check with your state securities regulator—go to www.nasaa.org. (See contacts for North Carolina at right.) To look into a securities firm or broker, you can also use a free online tool offered by the Financial Industry Regulatory Authority at www.finra.org/brokercheck. Consider payment. Once you know how a planner charges— fee-only, commission, a combination of the two, or salary only—you can decide what works for you. Is it sensible to pay a percentage of your assets for annual guidance? Or can you get what you need in two or three hours of sessions? 22 NOVEMBER 2009 Carolina Country
Invest the time to find a qualified, trustworthy financial planner. Interview. The advisor should provide you with a written agreement detailing how fees are paid and what services will be provided. Ask how he or she measures success with clients. And would you be required to implement a financial plan through this advisor, or could you execute it yourself? Listen to the advisors’ questions. Are they interested in your financial priorities and goals and your comfort levels with risk? Or do they begin to suggest products you might purchase and focus on your net worth?
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Lisa Hughes-Daniel is a marketing communications consultant who writes for the National Rural Electric Cooperative Association.
North Carolina resources If you are considering working with a stockbroker or investment advisor, the Securities Division of the Secretary of State in Raleigh can tell you whether a person or firm is properly registered as such in North Carolina. The division does not regulate “financial planners,” as far as the term per se, although an investment advisor may be referred to as a financial planner and do financial planning. Call (919) 733-3924 or visit www.secretary.state.nc.us/sec. For other types of financial planners, check with the Better Business Bureau. The main bureau doesn’t have a general phone number but at www.bbb.org, simply type in your zip code and it will direct you to your regional bureau’s site. There, you can obtain its phone number or investigate a person or business. For example, if you type in the Statesville zip code 28687 you will be directed to the BBB of Northwest North Carolina’s site. If someone offers you an investment that sounds too good to be true, the Securities Division encourages you to make sure that the offer and the person making it are properly registered with the state. Call the investor hotline at (800) 688-4507.