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How to Find the Right Financial Adviser

By Kate Rockwood | July 10, 2020 | Rally Health

You may handle the ins and outs of our daily finances just fine: paying bills and taxes; writing checks, managing a 401(k). But sometimes circumstances call for an expert. Maybe it’s a job change, marriage, divorce, or your retirement date is closing in. Many people are also looking for guidance right now in the wake of the economic challenges from COVID-19.

Seeking expert advice can be a smart move when your finances are hurting or you’re feeling uncertain, but it can be difficult to figure out exactly what kind of expert you need. Here's a guide to common financial pros, how to find quality candidates, and which organizations are offering free advice.

Financial Planners

What they do: Financial planners are the primary care doctors of the financial world. They can offer advice on almost every aspect of your finances from creating a budget or investing to untangling finances from a divorce, says Sarah Carlson, a certified financial planner and founder of Fulcrum Financial Group. Financial planners can also give you a roadmap for how to pay for major expenses like a wedding, a house, starting a new business, or college for the kids.  

When searching for a financial planner, you may want to find a certified financial planner (CFP), which means they’ve met certain minimum work requirements, have passed the CFP exam and have agreed to follow the CFP Board’s Code of Ethics and Standard of Conduct. “Anyone can hang out a sign advertising financial advice or planning, but to be a CFP a planner must pass a rigorous 6-hour exam and meet ethics and continuing education requirements each year,” Carlson says. If you want a planner to manage your investments, look for one who is also a registered investment adviser. That means they are registered with the Securities and Exchange Commission (SEC) and have agreed to always act in their clients’ best interests.

What you’ll pay: Many financial planners charge a fixed fee or an hourly rate for their services. Those who help manage your investments also might charge a commission based on the products (mutual funds, stocks) they sell to you, says Taylor Venanzi, a certified financial planner and owner of Activate Wealth. Some planners do a combination of two or three payment methods. For an hourly fee, you might pay $100 to $300 an hour. Commission-based advisers might charge between 1% and 2% of your portfolio.

Many experts recommend choosing fee-only advisers (they only get paid by you) as opposed to fee-based planners, who can be paid by a client and also receive a commission from selling you a certain product, Venanzi says. The concern is that it can “cause conflicts of interest with their clients,” he says, because they are also making money from third parties based on what they sell you.

How to find one: Search association sites like the Financial Planning Association (FPA) and the XP Planning Network. You can then check out individuals on the Financial Industry Regulatory Authority (FINRA) site. FINRA’s free service shows you “a snapshot of a professional’s career, including their employment history and any arbitrations and complaints against them,” Carlson says. 

Investment Advisers

What they do: Investment advisers are, quite simply, people who look after your investments. They’re trained to give you advice on what stocks or mutual funds to buy and what risks each investment brings. Their focus is on helping you make the best investments instead of looking at your entire financial picture, as is the case for financial planners. While many financial planners are registered investment advisers, most investment advisers are not planners. 

What you’ll pay: Investment advisers have a similar pay structure to that of financial planners with hourly, flat fee, and commission options. Likewise, you can find fee-only investment advisers who don’t get paid from the products they sell you and fee-based investment advisers who do.  

How to find one: Visit the National Association of Personal Advisors (NAPFA) site or search for registered investment advisers (who are required to work in your best fiduciary interest) through the Securities and Exchange Commission website

Accountants

What they do: The main goals of an accountant are to help you pay your taxes on time and properly — which also means making sure you’re getting all the deductions you’re entitled to, says Helena Swyter, a CPA and co-founder of Sweeter CPA in Chicago. An accountant can also study your financial information and offer analysis. Accountants that work with businesses often review the company’s books and prepare taxes and other financial forms, Swyter says. 

Some accountants have a CPA certification, meaning they’ve passed challenging exams on topics like regulation, financial reporting, audits, economics, and ethics. 

What you’ll pay: The average fee for an individual 1040 itemized tax form (both federal and state) is $294. The average cost for a non-itemized tax return is $188, according to the National Society of Accountants. Accountants also often charge hourly rates for services like estate planning, taxes and payroll. 

How to find one: Ask for referrals from people you trust and search for CPAs in your area on the American Institute of Certified Public Accountants site.

Credit Counselors

What they do: If you’re having trouble paying your debts or want help creating a budget, those are the specialties of credit counselors who work for credit counseling agencies. They can help you develop a plan to get out of debt and also connect you with financial information or classes. 

Credit counselors also can enroll you in a debt management plan (DMP) for your unsecured debts. Those are credit card debts or personal loans that are not secured by collateral. For example, a mortgage, which is secured by your house, would not qualify. With a DMP, a counselor negotiates with your credit card companies or lenders to lower your monthly debt payments (through lower interest rates or waived fees) to help you get caught up on your debt. Then, every month, you make one payment to the credit counseling agency and they pay your creditors. Keep in mind you won’t be able to use or apply for credit while enrolled in a DMP, which can last anywhere from three to five years. 

What you’ll pay: Many credit counseling agencies are nonprofit, but that doesn’t mean they’re free. If you wind up enrolling in a DMP, you’ll usually pay a $50 startup fee and $25 a month for management fees. The Federal Trade Commission recommends asking about any fees and getting all verbal promises in writing.

How to find one: Look for credit counseling agencies that are affiliated with the National Foundation for Credit Counseling or the Financial Counseling Association of America. You can then check the reputation of the organization through your state attorney general or consumer protection agency

Financial Therapists

What they do: A financial therapist is someone trained both in mental health treatment and in financial planning. They work with people whose mental well-being and finances are intricately connected. They can also help you figure out why you just can’t stick to a budget or how to work out financial disagreements with a partner. To be considered a Certified Financial Therapist through the Financial Therapy Association, financial therapists must meet certain education and experience requirements.

What you’ll pay: A financial therapist who is primarily a psychologist or social worker might charge $100 to $150 an hour, while someone who is primarily a financial planner will likely charge more. 

How to find one: Visit the Financial Therapy Association’s website. 

How to find help for free

Understandably, you might not want to spend a lot of dough sorting out your finances right now. Fortunately, many organizations are offering free help for people who have been financially impacted by COVID-19.

Note to our readers: This information is being made available as a free resource to the public. It is not an endorsement of any of the Finance-Related Resources listed in this article — financial consultants, planners, services, organizations/associations, websites, tools, lenders, credit unions, or banks. None of the Finance-Related Resources listed have solicited Rally Health to be included, and Rally Health receives no compensation from the Finance-Related Resources mentioned in this article.

Kate Rockwood
Rally Health