I am sure I don’t have to tell you that the financial road we all travel these days is bumpy. For those of us who need help with our money, it may be worth paying to have a financial adviser pave the way.
But where should you begin?
I hate to tell you this, but anybody can pretend to be a planner. Financial planners are not regulated by any uniform state or federal laws. Thus, their qualifications and business practices vary considerably.
And to complicate matters even more, the industry has any number of confusing credentials, and each professional organization that bestows titles claims their badge is best.
But is it best to hire a certified financial planner? Is a chartered financial consultant good enough? Can you be served by a personal financial specialist, certified investment management analyst or a chartered financial analyst?
See what I mean?
To take some of the guesswork out of choosing a financial adviser, Jack Waymire, author of “Who’s Watching Your Money? The 17 Paladin Principles for Selecting a Financial Advisor,” has created an online service, the Paladin Registry, at www.paladinregistry.com. His goal is to establish a standardized rating service for planners.
Planners who want to be selected for the registry have to answer more than 140 questions. Based on the information they supply, such as work experience, education and credentials, planners are rated on a five-star scale. Only professionals with three, four or five stars are admitted to the registry.
The registry contains detailed profiles and disclosure statements for 450 financial professionals. Forty-two percent of the advisers have advanced degrees, and more than 80 percent have multiple certifications, the most common being certified financial planner.
No financial services company or adviser has an equity stake in Paladin, nor do any of them pay the company to be listed, Waymire said. Paladin makes money by charging advisers a small fee when a match is made with an investor.
For their part, the financial professionals listed in the registry agree to fee-only compensation from client matches received from the service. The fee can be ether an hourly rate, a fixed fee or a fee based on assets under management.
To help people narrow their search, registry entrants are broken down into three categories:
* Planners. These advisers are paid to either review or develop a financial plan for you.
* Advisers. These professionals help you decide how to invest your money by recommending various investments.
* Investment managers. This would be an adviser who has authority, albeit limited, to make financial decisions on your behalf without prior approval.
“I really commiserate with people looking for a planner,” said Howard Gartenhaus, a financial adviser based in Rockville, Md., who earned a five-star rating from Paladin. “In many cases, you are entrusting your life nest egg to somebody you really don’t know. So any method to make that an easier process has got to be good for the consumers.”
Waymire wants investors to move away from selecting advisers based on their likability.
“I hear investors say my adviser is nice,” he said. “But nice doesn’t have anything to with competency or integrity.”
Washington Post Writers Group
Check them out
Here are some ways to investigate a financial adviser:
* Check certified planner credentials with the Certified Financial Planner Board of Standards Inc. at www.cfpboard.org, or call toll-free 888-237-6275.
* Check registration and complaint records with the federal Securities and Exchange Commission at www.sec.gov/investor/ brokers.htm; the National Association of Securities Dealers at www.nasd.com, or 800-289-9999; and the state division of Financial Institutions at www.dfi.wa.gov/sd, or 360-902-8760.
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