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How to Find a Planner

planners One of the first questions to ask when interviewing them: How are they compensated? Make sure you understand how they earn a living and what your costs will be.

Interview two or three planners. Get references from neighbors, friends or co-workers. But before you ask someone for the name of their advisor, make sure the person you're asking is similar to you in age, income, net worth, and objectives.

10 Points to Ponder About Prospective Planners

1. How many years have they been in business, and how did they get started? Don't assume that a grey-haired advisor has decades of experience; many people become planners after leaving (or retiring from) other careers.

2. What kind of people do they work with most often? Ask the planner to describe their typical client. If they describe you, it could be a good match.

3. What is the ratio of support staff to professional staff? Too few means the advisor has trouble getting work done. Too many means you're paying for the firm's big expenses. A good test: The planner should not be answering his own phone, but phone calls should be returned within one business day.

4. What is the planner's reputation in the field and in the local community? Planners who have roots tend to be more careful than someone who just blew into town. Look for someone with a solid reputation.

5. When setting your appointment, go to the planner's office instead of inviting him to your home. Inspect the office. How often does the phone ring before it's answered? Is the office organized? Is there a bustle of activity? Don't be taken in by offices that are too opulent, for clients pay the rent! If you see piles of papers all over, remember that one day, your file will be somewhere in that mess!

6. Do you understand what they tell you? If you understand what they're telling you, you should be able to repeat to others what they've said.

7. Does the planner have a clean record? Call the regulatory authorities - the NASD and the SEC - to find out.

8. Ask about the planner's investment methods. What types of investments does he work with? Is your money accessible or are there restrictions? Who makes decisions about investments - you or the planner? Can the planner execute transactions without your prior approval? Make sure you're comfortable with all the answers.

9. Get referrals. But keep in mind that no planner will give you a negative source. Use referrals to verify basic facts, such as what it's like to work with the planner, and whether she returns phone calls timely. Are mistakes often made or difficult to get corrected? How quickly and effectively are questions answered? Questions about style can tell you a lot about substance.

10. Must you sign a contract? What does it obligate you to do? Never sign one that doesn't let you cancel in 30 days or less. Never pay more than 50% in advance. When paying asset management fees, never pay for more than a year in advance.

Finding a financial planner will take lots of work and research.