3 Steps to Choose a Great Financial Planner

A financial planner will help you construct better, more personalized financial plans to achieve your goals and guide you in saving, budgeting, and investing your hard-earned money. So if you recently decided to hire one, then great for you! Below are three steps to choose a great financial planner.

Pick One Based on How They’re Paid

In case you don’t know, there are three basic ways advisors get paid: commissions-based, fee-based, and fee-only.

  • Commissions-Based Financial Planners

    These include brokers, registered representatives, and insurance agents. Commissions-based advisors focus on selling products like mutual funds, insurance, and annuities, and large financial institutions usually employ them. They are great people to hire if you want in-depth insights into these large companies and get great tips on how to avail and manage financial instruments. However, keep in mind that they’ll most likely promote their products while advising you.

  • Fee-Based Advisors

    While relatively new in the financial industry, fee-based planners can assist you in achieving financial independence. Not only do they offer their knowledge and expertise, but they also sell investment or insurance programs for a fee (since most of them are affiliated with brokers or agents).

  • Fee-Only Financial Planners

    But if you want a more comprehensive financial plan, best hire a fee-only advisor. Unlike fee- and commission-based planners, they won’t sell you any financial products, and they’ll act in your best interest. And instead of making a living through commissions, they earn through flat fees or hourly rates.

How financial planners are paid somewhat influences how they’ll serve your needs. So best pick someone who has your best interest at heart.

Determine How Much Help You Need

Next, you need to decide how long you’re going to hire a financial advisor. Depending on your current financial situation, you can choose from the following:

  • Hourly Consultation

    If you have any inquiries about a specific financial issue (e.g., buying a house, funding a business, or paying for medical schooling), then best go with a financial planner that offers hourly consultation. Since they charge by the hour, you’ll be able to have a total cost estimate based on the scope of work necessary.

  • Comprehensive Financial Planning

    Meanwhile, advisors who specialize in making comprehensive financial plans either charge per hour or ask for a flat fee. Either way, they’re great if you want a one-time roadmap to help you meet your money goals and achieve financial independence.

  • Asset Management

    But if you want someone who can help you take care of your assets, best hire a long-term financial planner. Not only will they help you maintain and grow your assets portfolio, but they’ll also help you craft a financial strategy that will set you for life.

Choose the Planner with Positive Traits

Lastly, look for the following when checking out a list of prospective financial advisors:

  • Credentials

    Ask for their licenses and certifications, particularly their CFP, CPA, CFA, and ChFC credentials. If they can’t present any of these, then best look for someone else.

  • Ethics

    Look for criminal charges, investigations, or any ethical or legal issues in your candidates. Pick the financial planner who has none.

  • Experience

    Check if they have the experience to deal with the financial situation you’re facing. If they can’t handle it, then they’ll waste both your time and money.

  • Compatibility

    Find a financial planner you’re comfortable working with. After all, they’ll have access to some of the most intimate details of your financial life.


As you can see, choosing the right financial planner is as easy as taking three steps. Follow the guidelines laid out above, and you can rest assured that you hire the most suitable financial expert.