When you hire a financial planner in NH, you are putting a ton of trust in that person. They’ll have access to all of your financial information, and they’ll be advising you on very important (and expensive) life decisions.
It’s critical that you work with someone you trust, and someone who has your best interests in mind. These traits would apply anywhere, but there are some specifics to keep in mind in New Hampshire.
Here are some questions to ask potential financial planners before you make your decision:
Are you a fiduciary?
If a financial planner is a fiduciary, that means they are bound – both legally and ethically – to put your best interests first. Their job is to act in a way that will improve your situation, and to use all of their skills and experience to guide you to make the best decisions for you and your family.
That means they aren’t allowed to act in a way that benefits them more than you. For example, they can’t guide you to one investment over another solely because they would earn more from it. It has to be the best option for you.
Nonfiduciaries are not held to the same standard, so there is more risk for the client.
Most financial planners these days are fiduciaries – but not all. That’s definitely something to be clear on before you hire a financial planner.
Who are your typical clients?
Almost 19 percent of the New Hampshire population is over 65, according to 2019 data from the U.S. Census. Many planners here work with those retirees and older professionals, but of course, some work with younger clients, too.
Talk to your potential planner about who they tend to work with. If you’re a mid-career professional, you might not want to go with someone who works mostly with retirees, for example. Look for someone who is comfortable advising you at your current life stage.
What are your qualifications?
When you hire a financial planner in NH, you’ll probably come across several different qualifications. It can get confusing, so which ones matter most?
All financial planners do not have the same qualifications. Anyone can call themselves a “financial planner,” but that doesn’t mean they’re properly educated or certified.
Someone who has completed the training and obtained the necessary experience is called a Certified Financial Planner®, or CFP®.
In addition to working with a fiduciary CFP®, pay attention to a planner’s background and experience.
What kind of education did they have?
What industries, if any, do they specialize in working with?
How do they keep up with training and education?
Knowing the answers to those questions will help you choose the right planner for you.
How are you compensated?
The way a financial planner is compensated says a lot about their services and values.
There are 3 main ways a financial planner is typically paid: Commission-based (or fee-based), fee-only, or a combination of the two.
In the past, it was common for advisors to earn commissions off investment vehicles or financial products. This is less common today, but it’s still in practice. This is the “commission-based” compensation model.
The problem with financial planners earning a commission from selling products is that it can create a conflict of interest. If one option would be better for you but another option would earn them more money, some planners might not choose in your favor.
Fee-only is exactly what it sounds like: A financial planner charges a flat rate for their services and does not earn any commission. They’re not incentivized to sway you toward any one product, so they can guide you toward the options that are best for you.
Ask any advisor you want to work with how they’re compensated: are they commission- or fee-based, which means they may charge a fee and earn commissions? Or are they fee-only, which means there’s only a standard rate for financial planning services?
Are you ready to hire a financial planner in NH? Contact me today to set up a meeting to talk about your goals. You can also download my free ebook for physicians for tips and information about getting your finances on track.