Finding the Best Financial Planner: NOT EASY! – Updated August 2014

finding a financial plannerIdentifying the best financial planner is not easy because anyone can call himself a financial planner. Plus, there is no licensing for planners and no industry tests that measure their knowledge.

In fact, selecting the best financial planner became downright dangerous. Here’s why. 20 years ago insurance agents figured out that calling themselves agents created automatic sales resistance because people had low regard for insurance agents. On the other hand, people had high regard for financial planners. The light bulb went on and thousands of insurance agents began telling customers they were financial planners. Sales resistance went down and production of revenue went up.

Unfortunately, financial planners have to produce plans. So they acquired cheap planning software that enabled them to produce simple, cookie cutter plans for their clients. Most of the plans were worthless because the software was inadequate and these so-called planners did not know how to use more sophisticated software.

These self-anointed financial planners took the deception one step farther. They selected planning software that recommended large amounts of insurance products. This strategy was a home run for agents pretending to be financial planners. The title reduced sales resistance and the financial plan sold insurance products for them.

Selecting financial planners is fraught with risk because thousands of them are not really planners. They are sales reps and agents who masquerade as planners to sell insurance and investment products.

There is one strategy you can employ. Only select financial planners who have one or more of the following designations after their names: CFP®, ChFC®, or CPA with a PFS®. These designations tell you they are serious planners who spent substantial amounts of time and money acquiring the specialized knowledge they need to provide real value to their clients. Plus, they had to pass examinations that tested their knowledge before they were awarded the designation. All of these designations received 5 Star quality ratings from Paladin Registry’s credential rating service.

Watch-out for fake credentials. A large percentage of financial advisors and financial planners use fake credentials to deceive you into believing they are more knowledgeable than they really are. In fact, some of them have 10 or 15 letters after their names. The media calls them alphabet soup. At the risk of stating the obvious you do not want advisors, who used deceptive sales practices, investing your assets. They proved they were untrustworthy when they lied about their credentials.

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