You can expect any financial planner to be in fairly regular contact with you, though the form that contact takes will vary. Robo-advisors typically send regular emails and account prompts while online planning services and traditional planners will meet with you throughout the year. You should update your planner with any changes to your financial situation.
For more leads, check the National Association of Personal Financial Advisors (NAPFA). These planners are fee-only, which means their only revenue comes from their clients. They accept no commissions at all and pledge to act in their clients’ best interests at all times. In many respects, NAPFA standards meet or surpass the requirements needed for a CFP credential.
The latter hinderance exemplifies passive management since few investment decisions have to be made by human fund managers. The former challenge does not use human beings at all—other than the programmer writing the algorithm. As a result, both can charge far lower fees than human fund managers can charge. However, according to some surveys, these lower-cost alternatives will often outperform actively managed funds—either outright or in terms of overall return—primarily due to them not having heavy fees dragging them down.
In Australia, a company providing financial services must obtain a licence from the Australian Securities and Investments Commission (ASIC). However, there are no requirements for the individuals providing the financial advice, and the ASIC website states that "Holding an AFS licence does not provide a guarantee of the probity or quality of the licensee's services."
Anyone can hang out a shingle as a financial planner, but that doesn’t make that person an expert. They may tack on an alphabet soup of letters after their names, but CFP (short for certified financial planner) is the most significant credential. A CFP has passed a rigorous test administered by the Certified Financial Planner Board of Standards about the specifics of personal finance. CFPs must also commit to continuing education on financial matters and ethics classes to maintain their designation. The CFP credential is a good sign that a prospective planner will give sound financial advice. Still, even those who pass the exam may come up short on skills and credibility. As with all things pertaining to your money, be meticulous in choosing the right planner.
Before hiring a planner to help with your finances, make sure to understand what you are paying for. Question the planner about his or her specific training and qualifications, fee structure, and services the professional will provide. Consider developing a list of questions when vetting a financial planner. Finally, check the disciplinary record and references for the planner to make sure you’re receiving the best quality financial guidance.