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Creating a Financial Planning – Finding a Planner

ByFreeman Linde, CFP®

“If you pay peanuts, you get monkeys.” ~ James Goldsmith

You’ve looked at all that’s entailed with financial planning, and you’re considering hiring a professional Financial Planner. Let’s cover the Why, Who, and How of finding a Planner.

Why find a Planner

We studied the Benefits of Financial Planning. All comprehensive and competent planning can generate these benefits. But that’s the key. Comprehensive + competent. Can you generate this planning on your own? Is it worth it for you to be come competent to do your own planning?

Minimum it would take people 40 hours to create a financial plan. That’s assuming lot of base knowledge.

If you earn $30/hr, it would cost you $1,200 to create your own financial plan.

If you are salaried at $120,000 and work 50 hours/week for 50 weeks, you earn $48/hr. It would cost you just shy of $2,000 to create your own plan.

And that’s assuming competence.

Certified Financial Planners study a minimum of 250 hours to complete their exam, and this is usually after passing 3-4 other licensing exams. Even with that, the pass rate in 2020 was only 63%. If CFP®s are studying and average of 500 hours for an exam, and have a minimum three years of experience working with clients and developing plans, do you think your competence can compete?

Will your plan that took you 40+ hours to complete be as good as someone’s with that much experience and expertise?

Maybe. Reading a couple of finance books and listening to a podcast doesn’t make someone an expert.

I’m not saying you lack the competence to make your own plan. It doesn’t matter what I think. It only matters what you think. Do YOU think you have the competence.

A great financial plan created by a great financial planner may help you:

  • Save more money
  • Make more money
  • Provide Peace of Mind and Confidence
  • Overcome procrastination and get items done
  • Save time and capacity

It is professional athletes that have a coach, not amateurs. It is those who want the best for their money who hire a coach (a planner). If you want the best, work with a professional. Who are you looking for?

What to Look For in a Planner

There are some Must Haves and some Preference Items to look for.

Must Haves:
  • True Fiduciary- Planner must, legally and in practice, act in your best interest in all things.
  • Competence – They must know what they’re doing. CFP® Preferred.
  • Support your Values – They don’t have to vote for the same person, but they should be able to put your values and vision first.
  • No Sales Quotas or Minimums – They can’t represent you if they represent the company.
Preference Items:
  • Independent RIA – Not affiliated with a Broker-Dealer or Insurance Company

Independent RIAs will check some of the boxes above.

How to Find a Planner

There are dozens of resources you could use to find one. Let’s distill it down.

Start with WiserAdvisor.com.

They screen advisors (though not perfectly) and those that make the cut are ahead of the pack to begin with.

Use the “Financial Advisor Directory” link in the top to browse by state or city. Depending on where you live, this will give you a shorter list of advisors that are all pretty qualified. You can then schedule initial meetings with them and ask them the five questions.

Or, if you’d prefer, you can fill out the questionnaire to get matched with three advisors who will call you.

Have the questions handy and ask them when they call if it’s convenient.

We recommend you interview 2-3 advisors to find out about them, their practice, and their planning and investment philosophy.

Be prepared to pay for it. If you pay peanuts you’ll get monkeys. A good planner and plan is worth the price, and you get what you pay for.

A great planner will always be worth many multiples of their fee. That’s why the average client stays with a true planner for 20+ years, with the leading causes of ending the relationship being death and change in circumstances.

Find a great planner. Create a great plan. Continually act on the plan instead of reacting to current events. You will be much better off for it.

This article is educational only and is not intended to be investment, legal, or tax advice or recommendations, whether direct or incidental. Again, this is not investment advice. Consult your financial, tax, and legal professionals for specific advice related to your specific situation. Never take investment advice from someone who doesn’t know you and your specific situation. All opinions expressed in this article are the opinions of the people expressing them. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. RetireMentorship is not affiliated with any Registered Investment Advisor, Broker-Dealer, or other Financial Services Company.

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