Remember those old Yellow Pages commercials with the slogan “Let Your Fingers Do the Walking?” The ads urged using the directory to find information on businesses vs. driving around town.
Today, with a cell phone in every pocket and internet access, finding a financial planner has far surpassed such rotary dial methods.
But choosing the right financial planner goes beyond just using technology, as four pros recently shared. Here are several factors to consider.
Professional Credentials vs. Experience
Like other industries, financial planning has its share of alphabet soup credentials, from certified financial planner to chartered financial analyst to personal financial specialist.
The “gold standard” among these is the certified financial planner, or CFP for short, according to both Mac Frasier of Oakworth Capital Bank and Rusty Yerkes at Samford University. Frasier is the director of planning at Oakworth, and Yerkes is professor of risk management and insurance and associate professor of finance at Samford’s Brock School of Business. Both earned the CFP credential.
“The CFP is the best way to get a broad education as a planner,” Frasier says. As he and Yerkes notes, earning the CFP requires passing the program’s educational requirements including a section on investments that covers investment planning, tax planning and estate planning, such as estates and wills. Insurance planning also is covered, along with employee benefits programs.
The credential also requires passing an arduous exam, having at least three years of financial planning experience, abiding by a code of ethics and earning or holding a four-year degree in any discipline.
“Now, are there good financial advisers who are not CFPs? Absolutely,” says Yerkes, who previously worked in finance. “I think it just demonstrates a level of professional commitment that goes beyond the minimum requirements to do your job. It is one criterion to look at.”
Shaw Pritchett, president and financial adviser at Jackson Thornton Wealth Management in Montgomery, sees the benefits of attaining the CFP, although he has not pursued it. At the same time, he notes his experience level as a certified public accountant. “I think a CPA brings a lot of expertise to financial planning as well. My previous experience in tax preparation has lent a lot of benefit to financial planning for clients,” Pritchett explains.
Whether it’s earning the CFP or another credential, building this knowledge base enables professionals to be confident in giving financial planning advice to clients, Pritchett says. “I would say they separate the pretenders from the contenders in financial planning.”
Referrals and Free Consultations
If you have a friend or family member already using a financial planner, that’s a good place to start searching, our experts agree, especially if your contact’s financial situation is similar to yours.
It’s best to interview a couple of different planners to determine who you’re most comfortable with, Frasier suggests. “As financial planners, we tend to know a lot about a client’s personal life, and we may hear things that they have not told anybody else,” he says. “So, you want to make sure that it is a good personality fit in addition to them being qualified to provide that advice.” And, he notes, most planners offer an initial consultation for free.
To Pritchett, finding and working with a financial planner is all about trust. “You’re trusting an individual with all of your financial resources. No one wants to go into retirement and realize in the eleventh hour that they’re unprepared for that,” he says. “Knowing someone else who has trust in an adviser speaks volumes and certainly would help a client make that decision.”
Fee Structure
An important question to ask potential planners is how they will be paid.
Frasier explains the three common compensation models:
- Fee only, where the client pays either an hourly flat fee or a percentage of assets managed
- Fee-based could be a mixture of fees and the adviser earning commissions on financial products that he or she sells (mutual funds, annuities, insurance)
- Commission-based.
With the commission-based model, there are potential conflicts of interest as the planner could recommend a product that results in a greater commission vs. another product, Frasier notes. This model’s use has waned compared with 10 to 20 years ago, he says, with more advisers moving to the fee only or a fee-based model for compensation.
“Advisers were more financial salesmen but have become more true advisers looking at the whole of somebody’s financial life,” Frasier says. And, he notes, these changes in fee models align with being a fiduciary, one who can only act in the best interest of clients.
Communications
Knowing how often a planner will meet with you and by what means are other questions to ask during your research, Yerkes advises. Will meetings be in person? Virtually? By phone? Quarterly, monthly or yearly? The CFP credential requires a planner to meet with you at least once a year, Yerkes says.
Client Base/Specialization
As you search for a planner, ask what types of clients he or she has served.
For example, if you own a business, seek out planners who have served other business owners and their unique financial planning situations, Frasier advises, whether that is a medical practice or some other industry.
You should also understand a planner’s capabilities. Some only focus on the planning aspect. “So, they are there to create the financial plan, make the recommendations, and help clients with the implementation of the plan, but they don’t necessarily manage investments for people,” Frasier explains. On the flip side, other advisers may do all of that and manage your money, he says.
Consider an Early Start and Insurance
CFP Mandy Harrelson, an instructor and program champion in the Harbert College of Business Department of Finance at Auburn University, guides finance majors on careers and helps set up internships for them. Like Yerkes, she worked as a financial adviser before entering the academic world.
Part of her guidance to students: Get with a financial adviser right out of college and start making a plan.
But there’s a misconception that you have to have a lot of money to have a financial adviser, Harrelson says. “They [students] will be making a salary for the first time. I tell them that it’s easier to start off with a plan of action with their new income.”
While still working as a financial adviser, she gave this same strategic advice to her husband as he prepared to become a nurse anesthetist. His new salary was going to be significantly higher than what he had been earning as a nurse, Harrelson explains.
Unfortunately, her husband was involved in an accident. Fully disabled now, he has not been able to work as a nurse anesthetist since 2018. But the couple was prepared by having “fantastic” disability insurance, helping to minimize their financial burden, Harrelson says.
Some advisers just want to focus on investments — the “sexier side of financial planning,” she says, not addressing the “defensive side” that is insurance. “But not talking about insurance is doing a disservice to the client,” Harrelson notes.
Nancy Randall is a Tuscaloosa-based freelance contributor to Business Alabama.
This article appears in the May 2025 issue of Business Alabama.
