Ensure Your Financial Future Is in Safe Hands

Apr 22, 2013


A Checklist for Choosing a Financial Services Provider 

April is Financial Literacy Month, so it’s the perfect time to evaluate your personal financial plan and identify the areas where your strategy is doing well and where it may need some change. A strong personal financial plan is an important part of developing and maintaining your long-term financial security.

Some individuals are comfortable developing a plan themselves, but in today’s world of economic complexity and insecurity, it is recommended that you seek professional guidance.  Whether you choose to go it alone or work with a professional, you need to understand the process, the terms you’ll encounter, and how different options will produce different results.

Choosing a financial planner or advisor is one of the most important decisions you’ll make. You’re trusting someone with your money, so make sure you feel comfortable with your decision.

Finding a Match

Take your time and do your research in choosing the right professional. Read the websites of professionals in our area to learn about their philosophy and background, then schedule meetings to interview two or three of those you might want to work with.

Referrals are a great way to start. Get the names of professionals from friends, neighbors, family, or business colleagues. If you are considering someone who is not familiar to you, ask the professional for several references and follow through on checking them.

During the interview, don’t be afraid to ask tough questions. This is your money we’re talking about. Some topics to cover might include the following:

  • Areas of specialization
  • Professional designations 
  • Registrations or licenses 
  • Education 
  • Work history 
  • Investment experience 
  • Products and services 
  • Disciplinary history

Your goal is to develop a complete picture of the candidates you are interviewing. Do you feel confident this person will represent your best interests and help you make decisions about your money that meet your personal financial goals?

Financial Planner vs. Financial Advisor

People tend to use the terms financial planner and financial advisor interchangeably, however, they offer different services. Many financial planners are also financial advisors, and vice versa. Both planners and advisors will ask you a series of questions to get to know you and understand your short- and long-term financial goals, but what they focus on next is usually the point of distinction.

A financial planner helps you create a guide for your financial future, focusing on taxes, retirement, and college savings. A financial planner’s services may help you identify the following:

  • What you need to do differently to achieve your goals
  • How much you need to save
  • A retirement strategy
  • What type of mortgage you should have
  • What type and how much insurance you need
  • How much to keep in an emergency fund 
  • How to improve your tax situation 
  • What estate planning advice is most relevant to your situation

A financial advisor specializes more in finding ways to invest your money according to your financial plan once it is developed. The financial advisor typically covers these issues:

  • Where you should invest your money to meet your goals
  • Whether to buy stocks or mutual funds 
  • If you should use index funds or active fund managers 
  • Which investments to use inside of your retirement accounts 
  • The risks of your investment plan
  • What type of investment return to expect
  • Which investments you should own in nonretirement accounts 
  • What types of taxable income your investments will generate 
  • How you can reduce taxable income 
  • How buying and selling your investment will affect your taxes
  • Payment for Services

Financial planners and advisors charge for their services in many different ways. Learning how you will pay them for their services should also be an important part of the interview process. Some typical fee structures are as follows:

  • Fee-only planners are paid only for the advice they give. This could include an hourly fee, a flat fee, or a retainer. They do not earn commissions by selling financial products such as life insurance or mutual funds. This means they represent you and your interests when giving you advice.
  • Commission-based planners make money from the products they sell.
  • Fee-based planners earn fees from advice and they make commissions on some of the products they sell.

Ask whether they receive any additional compensation or financial incentives based on the products they sell. Sometimes investment professionals and their firms receive additional compensation for selling a particular mutual fund or other investment product.

A CPA Can Help

As you prepare to make your decision, be objective. Focus on qualifications, experience, services offered, ethics, and results. Need some advice? A CPA can help. The CPA designation, which stands for certified public accountant, is one of the most trusted professional designations. Many CPAs have received specific education and training to assist you with your short- and long-term personal financial goals, and have earned the personal financial specialist (PFS) designation awarded by the American Institute of Certified Public Accountants.  Other important certifications to inquire about include the certified financial planner (CFP) and the chartered financial analyst (CFA).

If you need help finding a financial planner, ask family and friends for recommendations or use PICPA's CPA Locator.


The Pennsylvania Institute of Certified Public Accountants (PICPA) is a premiere statewide association of more than 22,000 members working in public accounting, industry, government, and education. Founded in 1897, the PICPA is the second-oldest state CPA organization in the United States.

Money & Life Tips are a joint effort of the AICPA and the Pennsylvania Institute of Certified Public Accountants (PICPA), as part of the profession’s nationwide 360 Degrees of Financial Literacy program.