AKAMAI MONEY

By Deborah Adamson
Advertiser Staff Writer

Q. I would like to hire a financial planner, but I'm not sure where or how I can find a good one. Can you help?

A. Finding a good financial planner doesn't have to be difficult. All it takes is a little patience and research.

Keep in mind that financial planning encompasses more than investing your assets. It includes estate planning, taxation, insurance and other areas of your financial life. Before you start your search, make sure to set clear financial goals — whether it's to buy your first house, send Junior to Yale, retire in Hilo with $50,000 a year or all of the above.

You'll probably notice that financial planners call themselves many things — investment consultants or representatives, financial advisers or even wealth managers.

What's important is that they be licensed as an investment adviser with the state — if they manage less than $25 million in client assets — or registered with the Securities and Exchange Commission if they handle more, said Ryan Ushijima, Hawai'i commissioner of securities.

Planners with professional designations have met educational and experience standards such as for CFP — certified financial planner. To find a CFP or verify that your planner is one, go to www.cfp.net. There are 196 CFPs in Hawai'i; more than 42,000 nationwide.

Other designations include CPA/PFS, for certified public accountant/personal financial specialist, and ChFC, for chartered financial consultant. To understand more about such designations, go to www.nasd.com/investor/resources/designations.

The Financial Planning Association also has a list of planners at www.fpanet.org. The Hawai'i chapter can be reached at 522-0100. Finally, don't forget to ask for referrals from family, friends or co-workers.

Check the planner's history to see if he or she has had any complaints. Call 586-2740 if they are licensed with the state.

Common complaints in Hawai'i include unlicensed planners or the purchase of unsuitable investments, such as an 80-year-old investor who was put into a variable annuity that cannot be cashed for 10 years without paying a hefty charge, according to state regulators.

To check on disciplinary actions by the SEC, call (202) 942-7040 or go to www.sec.gov. Click on "Investment Management" under SEC Divisions; then "IAPD: Investment Adviser Public Disclosure Website" under Investment Adviser Regulation; then "Investment Adviser Search."

If they are a CFP, call (888) 237-6275 or go to www.cfp.net/search. If the planner is a broker as well, call the National Association of Securities Dealers at (800) 289-9999 or go to www.nasdr.com and click on "NASD BrokerCheck."

Once you've narrowed down a list of planners, interview at least three of them and get references.

Ask them how much experience they've had and make sure the planner has the expertise you need. Advisers can specialize in different areas such as divorce or retirement.

Find out how they're compensated — it will show you any conflicts of interest. Financial planners typically offer fee-only or fee-based services. With fee-only, they may charge a flat rate, an hourly rate, a retainer or a percentage of your investments. They don't get investment commissions.

Fee-based planners make money from fees and commissions from the investment products, like mutual funds, you purchase through them.

Fee-only planners tend to have fewer conflicts of interest since they won't be motivated to push investment products where they make more money, said Barbara Roper, director of investor protection at the Consumer Federation of America based in Washington

To get a list of fee-only planners in Hawai'i, call 888-FEE-ONLY or go to www.feeonly.org.

In Hawai'i, fees can range from zero to $10,000 for a financial plan, depending on its complexity, said Mel Hertz, president of the local chapter of the Financial Planning Association.

Some planners may give you a free consultation, which you should use to observe them. Do they ask you questions about yourself and your financial goals or do they seem more interested in pushing a product? State law requires that they gather enough data to give suitable advice, Ushijima said.

Financial planners generally meet with you about four times, Hertz said. In the first session, you'll get to know each other. For the next, they'll collect financial information from you, which will result in a financial plan overview presented in the third meeting. In the fourth session, plan details would be finalized. The meeting could stop there, at which point you pay for the plan and leave, or the planner can implement it for you.

If you're switching planners because of problems, you can file a complaint with the state at 586-2740. For the CFP, call (888) 237-6275 or go to www.cfp.net. For the NASD, go to www.nasdr.com or send a detailed letter to NASD Investor Complaint Center, 1735 K Street NW, Washington, DC 20006. For the SEC, call (202) 942-7040 or go to www.sec.gov.

Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.