How to choose a financial planner

If it seems like financial planners are everywhere these days, it’s because they are! With so many baby boomers nearing retirement, and their parents dying and leaving them estates, the industry has exploded. You’ll financial planners at your bank, credit union, insurance company, stockbroker and even your lawyer’s office. Many tax accountants are taking up the mantle of financial planning, too.

With all of these choices, how do you chose the best financial planner? Here are some tips:

Ask about their background. There are no regulations for this industry, and your 6-year-old could claim to be a financial planner. Look for someone with strong investment background. You also want someone with experience in both a bull and bear economy. The 1990s spawned thousands of financial planners, many of them recent college graduates. Be sure they have equal experience advising their clients in the good times and the bad.

Chose a financial planner who has one of the three leading industry designations. These are the Certified Financial Planner mark -- the best-known financial planning designation -- Chartered Financial Consultants(ChFC) offered by the insurance industry or Personal Financial Specialist (PFS), the designation earned through the field of accounting.

Ask if they get paid a commission for the investment products that they sell. Most financial planners do, but it’s important to find out if your planner will think outside the box and sell you a financial product that suits your needs rather than their need for a fat commission check.

Ask about their investment philosophy. A good financial planner won’t increase your portfolio in three months. A comprehensive financial plan should help you to minimize your taxes, protect your assets, improve your credit, leave something to your family when you die and grow your wealth over time. Beware of the get-rich-quick proponents.