Choosing a financial planner is one of the most important financial decisions you will make. Many factors should inform your choice, including how much you have to invest, your financial goals, the type of planner you are most comfortable with, and the history of the financial planning firms you’re considering.
When you’re ready to research a financial planning firm’s history, here are 7 resources that can help.
Fortunately, many resources are available to help you learn about the background and history of financial firms, including government agencies and industry organizations.
Governing bodies like the Securities and Exchange Commission have regulatory power over financial planning firms, and can levy penalties if a firm doesn’t abide by applicable regulations. Others, like the CFP Board, are non-government organizations that set forth voluntary standards for financial planners.
Resources for researching financial planning firms
The CFP Board is a nonprofit organization that sets voluntary standards for professional financial planners. In order to earn CFP certification, financial planners must complete extensive training, meet experience requirements and uphold the organization’s high ethical standards.
You can search for a certified financial planning practitioner through the organization's website.
FINRA is not a government body, but is a not-for-profit organization authorized by Congress to oversee anyone who sells, buys, or brokers securities.
You can get information on the background and history of individual brokers, advisors, and firms at FINRA’s searchable BrokerCheck website.
A non-government professional association, the FPA certifies financial planners who meet high standards for education, have successfully completed the CFP Board examination, and meet requirements for experience and ethics.
The organization offers a searchable online database of certified financial planners at www.plannersearch.org. You can find contact information for individual planners, as well as their areas of specialization, professional designations, and how they’re compensated.
Each state has its own insurance industry regulators, and NAIC sets standards and best practices, conducts peer reviews, and provides regulatory support and coordination for regulators in all 50 states, the District of Columbia, and five U.S. territories. Through the NAIC’s Consumer Information Source, you can find information on enforcement actions against individuals or firms engaged in the insurance industry, get company financial data such as annual reports, and even file a complaint.
NAPFA is a professional association representing fee-only financial advisors — financial planning professionals who take no commissions from securities sellers. (Fee-only financial advisors are not designated as such by their affiliation, which is voluntary, but NAPFA only accepts members who are fee-only.)
The organization sets standards, and requires each advisor to annually sign a fiduciary oath and subscribe to the organization’s code of ethics. NAPFA offers a database of financial planners that you can search by location, name, and a range of filters such as product types you’re interested in or your financial goals.
NASAA is a professional association that represents securities administrators in all 50 states, the District of Columbia, U.S. territories, Canada, and Mexico. In the U.S., the organization represents state securities agencies charged with investor protection and whose authority covers anyone who sells securities to the public. Through NASAA’s website, you can find contact information, including phone numbers and websites, for state securities regulators.
The SEC is a government body charged with protecting investors by monitoring markets for fairness and efficiency, ensuring investors have access to crucial information about the investments they make, and enforcing regulations that govern securities transactions. The SEC can (and does) bring civil enforcement actions against individuals and organizations that violate securities laws.
For even more tips on how to evaluate a financial planning firm, including interview questions designed to touch on multiple aspects of service and methodology, download our free workbook and continue your search with confidence.