BBB Advice on Finding a Trustworthy Financial Planner

March 22, 2009

Between the volatility of today’s bear market and revelations of Bernie Madoff-like Ponzi schemes duping investors, finding a financial planner or money manager you can trust is more important than ever.

The Better Business Bureau offers this advice:

Get educated. Financial planning and investing can be intimidating, but many consumers are doing their homework — resources are available online, in stores and at libraries. Not only does this help when meeting with a financial adviser, but many consumers have found such education allows them to manage their own finances.

Look for credentials that matter. Financial planners, all of whom must be registered with the Securities Exchange Commission and state regulators, can attain many professional credentials, Certified Financial Planner, or CFP, being the most important one. It indicates the adviser has passed a rigorous exam and regularly pursues continuing education. Other groups are the National Association of Personal Financial Advisors and the Financial Planning Association.

Don’t be sold by a slick pitch. Watch out for planners who guarantee big returns on investments. Risk is always involved in investing and no honest planner can guarantee results.

Conduct a tough interview. After identifying several potential financial advisers, make appointments to meet them and ask about their experience and expertise, and to determine if you and the planner can develop a good rapport. 

Don’t be afraid to ask tough questions including how long the planner has been in business, their qualifications and licenses, experience with similar clients and if they have been the subject of any disciplinary actions. Ask for references.

Consider the fee structure. Financial planners employ many fee structures. Some charge by the hour or a flat rate. Others earn money through commissions on projects sold, which can create a conflict of interest, or a combination of fees and commissions.

If you already have a good handle on your finances, another option is to find a financial planner willing to offer advice — and a second look — for an hourly fee.
Start With Trust. For more reliable consumer tips, visit or call 970-484-1348.