Why Hire a CFP?

Finding a financial advisor is daunting because you know it’s important and yet it’s so hard to figure out. Bottom line up front: Start with finding Certified Financial Planners (CFP®) that understand your situation; do a little online research and then interview a couple.Tune into this week’s podcast to learn more about:Hiring a CFP®. This should be a minimum bar. There are plenty of planners out there and it shows a commitment to doing your best job for clients.Who calls themselves advisors? It could be a broker, someone working at a local bank, a wealth manager or an insurance provider. Unfortunately hanging out a shingle of “financial advisor” is not distinguishing enough.Look for domain knowledge. Not only knowledge of financial planning, but also your specific situation. Are you close to retirement? Are you starting a family? Have you just taken your first job?Understand compensation: make sure that you know how the advisor is paid. Is she paid by how much money she manages? Or paid a commission if you invest in a certain mutual fund or buy life insurance? Make sure you know how your incentives are alignedResources:Find a CFP®: Lets Make a PlanFind a Fee-Only Fiduciary Planner: NAPFA.orgTen Questions to ask a Financial Advisor [Marotta on Money]Another: Ten Questions to ask a Financial Advisor [NerdWallet]