Need Help With Your Money? A Millennial's Guide To Finding A Financial Planner
If you're a young worker developing financial goals and struggling to understand how to reach them -- whether it includes saving for a home or children, paying off college or planning for retirement -- one of the best things you can do is to ask for help. A qualified financial planner (CFP) is a good first step, but you may not know how to find one that you can trust and that fits your needs. Rather than give up, try using these 3 tips to find the best professional to help plan what to do with your money.
Start at Home. One of the best ways to find a financial planner you can trust is to ask those around you with similar goals or situations. Get recommendations from people who are in a similar life circumstance or have reached financial goals you share with them. If you can't get enough recommendations, make a list of local certified financial planners so you can begin checking them out in person.
Check Their Portfolio. Armed with your list, check each one out on social media, professional sites like LinkedIn, financial planning associations and local review websites. Their presentations on the internet and in person should tell you whether they have experience planning for millennials or are reaching out primarily to different types of investors. Millennials have different communication styles and needs than traditional clients so be sure they are comfortable communicating in ways that work best for you – including text, email and social media.
Interview Them. Once you've narrowed your potential list down or settled on a few choices, it's time to meet the planners in person. In this interview, you will want to ask a few specific questions in addition to getting a feeling for the individual. These questions include things like:
How much do they charge and what is it based on? Many investors prefer fee-only planners, but you may need a commission-based planner if you want to purchase certain products like insurance.
What services do they provide? Not all financial advisors and planners offer the same specialties. For example, some may offer full-featured planning or budgeting services while others focus on investments only. So be sure you know what they do and don't provide. If you're on a budget or only want a limited amount of help getting started, find out if they provide a la carte services.
What type of clients are their specialty? Not all clients are the same, and you want someone who understands your needs and wants. Young workers often have different needs – such as a desire to travel or volunteer, large student loan debt or an interest in renting rather than buying items – so be sure your financial planner can help you meet those needs.
Does the financial planner have a sample plan? Ask to see a sample financial plan he or she would create for you. Pay attention to how they present the information in person too. You want to be able to receive documents you can understand and use, so be wary of someone who hands you a stack of incomprehensible financial charts or offers only generalities.
What is their approach? Working with someone who seeks to understand you and what you're trying to do is vital to meeting your goals. Your investment philosophy should gel with theirs and they should do a lot of listening to you during the interview as well. The interview should be very interactive rather than one side doing all the talking and should reflect that they focus on the goals you find important even if they are nontraditional goals.
By knowing how to start seeking recommendations and what research to do when following up, you can find the right CFP person to help you plan for the future.