The formula to consider in selecting a financial advisor is CCOPR (Credentials, Compensation, Objectivity, Product, Relationship) – remember it sounds like COPPER but it is gold to you.
As of now, no credentials are necessary to be a financial advisor – no degree(s), no designation(s) and no experience.
In order to have the skills needed and a broad enough perspective to practice the science of financial planning artfully, look for an advisor with at least one degree in Finance. Also, check for the Certified Financial Planner Registrant designation (CFP®). It requires passing an exam, agreeing to abide by a code of ethics and taking continuing education.
Remember, a few years of experience with the proper education and designations are worth more than many years of experience without it.
Some Financial Advisors are compensated with what are essentially commissions. Others are fee-only and are compensated with only fees, by the hour or by the project. Still others charge both commissions and fees yet call themselves fee based. Ask direct questions about compensation, so you know what you’re paying for.
Ultimately, you’re seeking the ability to implement a plan with the lowest expenses and best performing products without product bias. This requires objectivity which means no ties except to you.
There are no uniform standards in financial planning, making it hard for consumers to compare quotes. Additionally, one size does not work for all. That’s where the perspective derived from the appropriate degree(s), designation(s) and experience become essential to assure you get the plan you need- no more, no less!
Most people consider their relationship with someone first when they should consider it last, after the CCOP criteria. Many stories exist of people who were taken by people they knew and who they thought they could trust.