How to Find a Good Financial Planner

THERE are no licensing requirements or laws to protect the Consumer, so anyone can hang out a shingle and call himself a financial planner regardless of education, experience or ethics. The Securities and Exchange Commission requires financial planners to register as investment advisers, referred to as RIAs, and can put them out of business for breaking securities laws. But anybody can register for $150. Even planners admit that too many who claim the title are incompetent or worse. But first rate financial planners are increasingly available if you know how to identify them. You can find some by asking for recommendations from an accountant or lawyer, by attending the free seminars that planners often hold to recruit clients, and by requesting names from the institutes that train planners.

You are probably best off with a planner who also has experience as a lawyer, an accountant or a licensed insurance, securities or real estate salesperson. Such credentials show that the planner has specialized training and can be made to answer to some body of regulators. The initials CLU after the planner's name stand for Chartered Life Underwriter and mean that he or she is expert in life insurance. The CPA pedigree for Certified Public Accountant, of course suggests considerable knowledge about tax planning.

Good practitioners also usually have credentials as Certified Financial Planners from the International Board of Standards and Practices for Certified Financial Planners. Most CFPs study courses prepared by the College for Financial Planning (4695 South Monaco Street, Denver, Colorado 80237 3403). People who have completed its study program and passed its series of examinations on taxes, estate planning, investments and other subjects have the initials CFP after their names. Two hundred and fifty thousand people purport to be financial planners, but only 24,000 are CFPs. Another respected certification is that of Chartered Financial Consultant (ChFC), awarded by the American College (270 Bryn Mawr Avenue, Bryn Mawr, Pennsylvania 19010). Cross off any candidates who have not bothered to get at least this much training. Be sure to check the planner's credentials with the organization that issued them. Pre tending to be a Certified Financial Planner is considerably easier than pretending to be a lawyer or CPA.

The International Association for Financial Planning has compiled a rather elite registry of some 1,000 financial planners. Among the requirements for admission are a degree in a field related to planning, at least three years' experience as a planner and a passing grade on a tough, all day test. Once admitted to the registry, planners must put in 30 hours of continuing education each year to retain their membership. To find out whether any of the registry's members work in your area, write to the International Association for Financial Planning (Two Concourse Parkway, Suite 800, Atlanta, Georgia 30328) for The Directory of Registry Financial Planners and enclose $2.50 for handling and postage.

You should assemble a short list of prospects, and be sure to interview each one. Ask for samples of plans he has prepared, and the names of clients you can call.

If a plan is all that you want, there is a flourishing and inexpensive plans by mail industry. You fill out a questionnaire and back comes a computer generated report with some recommendations. For generic advice but not specific investment recommendations, the Consumer Financial Institute (51 Sawyer Road, Waltham, Massachusetts 02154) charges $300. Major brokerage houses and some large banks and insurance companies also offer these canned plans.