FP Article 17
How to Choose a
Financial Planner
by Rajen Devadason
Financial planning is the process of meeting
your life goals through the proper management of
your finances.
Certified
Financial Planner Board of Standards
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Financial planning is a high and
noble profession.
Why do I say that?
Well, its finest practitioners are
dedicated to helping other men and
women reach their highest life
aspirations through the appropriate,
proper management of their finances.
This commitment often extends for
years.
But because money
is involved in the equation, there
is always the risk of attracting the
attention of unscrupulous
individuals. |
A major downside to most approaches of finding a
good financial planner is that in many countries
virtually anyone can call himself or herself a
financial planner without any official
licensing! This means a caveat emptor
(let the buyer beware) approach really should be
adopted by those seeking the help of financial
planning professionals.
Thankfully, in my own country of
Malaysia, the situation is a lot safer for
consumers. That is because Malaysia was the
first country in the world to legislatively
control the term ‘financial planner'.
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This is an article on choosing a
financial planner. I hope you enjoy
reading it. But if it isn't what
you're looking for, you're welcome
to search for something that better meets
your needs. Thank you for allowing
me to serve you.
Rajen Devadason |
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One of Malaysia's two financial
regulators, the
Securities Commission
takes a stern view of anyone who calls himself a
financial planner without the appropriate SC
licence – stipulated penalties include a 10-year
prison sentence and a RM1 million fine (which
works out, at the time of this writing, to about
US$270,000).
But regardless of which country
you live in, the best way for you to identify a
great financial planner is to ask yourself 3
questions:
1. Why
do I want to work with a financial planner?
2.
How will I educate myself
internally first before beginning my external
search for a financial planner?
3. What
is high level financial planning advice,
guidance and implementation worth to me?
Once you have taken the trouble
to think through those 3 important questions,
preferably on paper, you will be parsecs ahead
of most other people who never bother to carry
out such an exercise. Those unfortunates are the
ones who usually end up becoming easy, juicy
bait for financial sharks!
What you do next depends entirely
upon you. But here are 4 basic pointers to help
you along your way:
1. If you want to continue to educate yourself
in D-I-Y financial planning, reading some of the
other articles in this archive might be helpful.
You may begin doing so
here.
2. If you want to learn 10
great questions to ask when choosing a financial
planner, read this
article from
the Certified Financial Planner Board of
Standards.
3. To know what documents a
financial planner might ask you to prepare and
bring along to an initial meeting, read
this. Just be
aware that many of the documents mentioned are
only relevant to the American scene, but even if
you don’t live in the US, you will still be able
to get an idea of the type of information
required for a fruitful initial meeting.
4. To learn how to ask
particularly tough, knowledgeable questions of
people who say they are financial planners,
particularly if you aren't certain of their
credentials, read
this Smart
Money article.
Working with the right financial
planner can be a rich and rewarding experience.
But the consequences of being taken for a ride
by someone who is less than 100% ethical can
have grave repercussions.
So, be careful to do your
homework; take time to interview several
potential planners (I recommend sitting down
with at least 3) before deciding which
professional is the best fit for your
personality and circumstances.
(Those of you who live in Malaysia might want to
adopt the prudent approach of limiting your
selection of financial planners or financial
advisors to the serious professionals listed in
the CFP directory of the
Financial Planning
Association of Malaysia site.
Disclosure - I'm listed there too.)
Finally, regardless of what
method you choose to select a financial planner,
remember that ultimately no one cares more about
your financial health than you do!
I suggest strongly that you take
your time to carry out at least some of the
research I've suggested here.
If you'll take the trouble to do
all that extra work, then I believe you will
stand head and shoulders above most of your
friends and family when it comes to harvesting
the rich, exciting financial fields of our
gradually unfolding 21st century.
© Rajen Devadason
