How to Find a Financial Planner You Trust

The coronavirus pandemic touched off increased demand for toilet paper, Clorox wipes, at-home hair coloring kits—and financial advice. A recent survey by the Certified Financial Planner Board of Standards found that nearly 80% of CFPs had seen an uptick in questions from existing clients since the pandemic began, and one-third reported an increase in calls from prospective clients.

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That’s not surprising. Millions of Americans have seen their retirement savings bludgeoned by the bear market. Many are reviewing estate plans and insurance coverage. And although the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law in March, has numerous provisions to help Americans weather the crisis, it also raises a lot of questions, ranging from what to do with your stimulus check to whether you should take an emergency withdrawal (or loan) from your 401(k) plan.

“You can be a DIY investor when you have a 10-year bull market,” says Kevin Keller, chief executive of the CFP Board of Standards. “When we’re in a state of chaos, people feel like they really need somebody to talk to.”

A financial planner can help you navigate these disquieting times, but it has never been more important to find one you can trust. A critical step is finding a planner who adheres to the fiduciary standard, which requires that the planner must put your interests above his or her own. Fiduciaries are required to avoid conflicts of in­terest, such as steering you toward mutual funds with hefty commissions for themselves instead of lower-cost alternatives. Securities brokers follow a less stringent “suitability” standard, which means the investments they recommend must be suitable based on the client’s age and risk tolerance but don’t necessarily have to be the least expensive options available.


During the Obama administration, the Department of Labor adopted a rule that would have required all financial professionals who give retirement advice to comply with the fiduciary standard. That rule was struck down by a U.S. Circuit Court, which held that the DOL didn’t have the authority to enforce the rule.

Since 2009, certified financial planners have been required to comply with the fiduciary rule when providing financial planning, such as developing a retirement strategy. But starting June 30, all CFPs will be required to comply with the fiduciary standard whenever they give financial advice. The broadened standard will most likely affect brokers and insurance agents who are CFPs but don’t typically provide financial planning.

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Planners who fail to comply with the fiduciary rule risk losing their CFP designation, which is overseen by the CFP Board of Standards. The requirement is “a very strong fiduciary standard,” says Ron Rhoades, director of the personal finance program at Western Kentucky University. “Basically, you have to make decisions without considering your own personal interests or those of your firm, and that truly means putting the best interest of the client first.”

Conflicting Standards?

Even with the stricter standard, supporters of the fiduciary rule say there’s plenty of potential for con­fusion. In part, that’s because a new Securities and Exchange Commission “best interest” rule also takes effect June 30. The rule requires brokers to act in their customers’ best interest and disclose any potential conflicts of interest. They’re also required to explain their reasons for recommending a particular investment. In a statement last year, SEC chairman Jay Clayton said the new rule “will substantially enhance the broker-dealer standard of conduct beyond existing suitability obligations.” Critics of the rule say it lacks teeth, in large part because it doesn’t define “best interest.” They also worry that the rule could give investors a false sense of security.


The new rule will eliminate some unethical brokerage practices, such as contests that reward brokers for selling specific types of investments, Rhoades says, but other troublesome activities will still be allowed. For example, he says, the new rule doesn’t prevent brokers from selling high-cost variable annuities, nor does it bar them from dividing a client’s investments among several different fund companies to avoid discounts on commissions for large accounts. That means their clients will earn less money on their savings, Rhoades says.

Missing Information

Another point of contention—and possible confusion—is the CFP Board’s recent decision to remove compensation information from its consumer find-a-planner website, In the past, CFPs who wanted to be listed on the website were required to disclose their method of compensation-fee-only, commission-only or a combination of the two. In March, the CFP Board removed the compensation description. In a letter to planners, the board said the three categories were “not very specific or helpful to consumers” and said the best way to obtain that information was by talking with a prospective adviser.

Keller says the tool still allows consumers to search for planners based on a number of factors, including the amount of money they have to invest and the planner’s particular areas of expertise. Before the tool was revised, fewer than 10% of users screened for compensation, he says.

Opponents of the change argue that the compensation disclosure was very helpful to consumers who were interested in hiring a fee-only planner. Since fee-only planners make up a minority of CFPs—about 10% of some 87,000 planners—consumers interested in hiring a fee-only CFP will need to have conversations with many prospective planners to find one that charges on that basis, according to the Committee for the Fiduciary Standard, an advocacy group of CFPs that supports the fiduciary rule.


Although you can no longer use the CFP’s search tool to screen for fee-only planners, you can search for one at the website of the National Association of Personal Financial Advisors (NAPFA). NAPFA is an association of about 3,800 fee-only advisers who must sign a fiduciary oath and comply with the association’s ethics. You can also search for a fee-only planner at the Garrett Planning Network, a nationwide network of fee-only planners who charge on an hourly basis, or XY Planning Network, a group of planners who charge a flat monthly fee and specialize in helping Gen X and Gen Y clients.

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Many consumers are wary of hiring planners who work on commission because they’re compensated for recommending specific products or investments, and that creates the potential for conflicts of interest. The CFP Board contends that the broadened fiduciary standard reduces the potential for such conflicts. In addition, Keller says fee-only planners aren’t free of conflicts, either. Many fee-only planners charge a percentage of the amount of money clients give them to manage (known as assets under management, or AUM), which can range from 0.25% of AUM for a robo adviser—automated advice provided by many banks, brokerages and financial service firms—to 1% or more for a full-service planner. A planner whose fees are based on a client’s AUM might be tempted to discourage actions that would reduce the size of that account, such as taking a large withdrawal to pay off a mortgage, he says.

Doing Your Due Diligence

Even with the broadened fiduciary standard, you should take extra steps to make sure any planner you hire is in fact looking out for your best interest. Start by making sure that the planner is a certified financial planner. To earn the CFP mark, a planner must complete a course in financial planning, pass a six-hour exam, have two to three years of professional experience, and complete 30 hours of continuing education every two years.

Once you’ve established that the planner is a CFP, do a background check. The CFP’s website,, will tell you whether the planner has ever been publicly disciplined by the CFP Board or has filed for bankruptcy within the past 10 years. Next, go to BrokerCheck, a search tool provided by the Financial Industry Regulatory Authority (Finra), a self-regulatory organization for the securities industry. This site will provide a record of a planner’s employment history and any regulatory actions taken against the individual, along with records of arbitration decisions and complaints. BrokerCheck has its critics: Research conducted by the Stanford Law School found that it’s not difficult for brokers to get complaints expunged from the site, even if they’re not in error. Still, brokers can’t erase criminal or regulatory infractions from BrokerCheck.


You can also do a background check at the Securities and Exchange Commission’s database of investment professionals, where you’ll find information about the adviser’s professional designations, experience, previous employment, other business activities, and any complaints or disciplinary actions by regulators.

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Once you’ve completed your vetting, interview a prospective CFP. If you’re seeking investment advice, ask the planner to describe his or her philosophy and how it will be put into practice, says Harold Evensky, a CFP and founder of Evensky Katz/Foldes Financial.

Even though the broadened fiduciary standard takes effect June 30, it could be a while before some firms change their business practices, Rhoades says. For that reason, consumers should take extra steps to make sure a CFP is acting as a fiduciary. The Committee for the Fiduciary Standard has created a fiduciary oath you can ask a planner to sign. It says that the planner will always put your interests first, avoid conflicts of interest and disclose any conflicts that are unavoidable. You can find a copy at

“It’s a simple statement that no one should have any trouble signing,” Evensky says. “If they do, that’s a serious red flag.”

A Guide to Credentials

Anyone can call himself or herself a financial planner. If you’re interested in getting advice, it’s important to understand the different designations planners use. Some require a serious commitment to education and ethics; others are just impressive-sounding appellations that signify little (or nothing). Some of the most common designations:

Certified financial planner. A CFP must complete 18 to 24 months of study, pass a rigorous six-hour exam, undergo a background check, and work for three years as a financial planner or do a two-year apprenticeship with a CFP professional. Starting June 30, CFPs are required to comply with the fiduciary standard.

Registered investment adviser. RIAs are independent advisers (many of whom are also CFPs) who are required to comply with the fiduciary standard. They must file what’s known as Form ADV, which outlines the services they provide, with the Securities and Exchange Commission. Find it at

Registered representative. Also known as brokers, registered representatives buy and sell stocks, bonds, mutual funds and other investments. Most must register with the SEC and Finra, the industry’s self-regulatory organization; they must also pass a qualifying exam and obtain a state license. They’re not required to comply with the fiduciary rule, but any investment they recommend must be suitable, based on your income, risk tolerance and investment objectives.

Personal financial specialist. A credential obtained by certified public accountants who also provide financial planning services. To obtain the designation, a CPA must pass an exam that covers investing, retirement, estate planning and other personal finance issues. A CPA/PFS must act as a fiduciary when providing financial planning advice.

Chartered financial analyst. CFAs must pass three six-hour exams that cover money management, economics and other issues, and have four years of professional experience in the investment industry. CFAs are required to comply with the fiduciary standard, according to the CFA Institute Code of Ethics and Standards.

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