Picking the Perfect Financial Planner

Pablo Picasso once quipped, “I’d like to live as a poor man with lots of money.” And wouldn’t we all? To have money, and all the wondrous things that money can provide, without the hassles and headaches of tending to that money –it would seem almost, er, surreal. Yet if anyone could make Picasso’s dream come true, it would be a capable financial planner.

Suppose you determine that you need a financial planner, where in this great, big American landscape would you find a good one?

Ask yourself why

Financial planners — whose business cards may also say financial adviser, financial consultant or wealth manager — vary widely in their practices and expertise. Most, if not all, planners will manage or provide guidance on investments. Others may offer counsel on everything from how to balance a checkbook and reduce debt to how to lower taxes or set up an estate plan. Some will work with you for a day to help you get your fiscal affairs in order. Others prefer longer-term arrangements. Take a good look at your own strengths and weaknesses around money, and ask yourself where you most need a helping hand.

Gather names and brochures

Start by drafting a list of potential planners. Begin close to home. Ask family, friends and business colleagues for referrals. You can also contact either the National Association of Personal Financial Advisors (www.napfa.org) or the Financial Planning Association (www.fpanet.org) for a referral to members in your area. Some people are OK working with a planner from afar, perhaps even in another state. Ask yourself as to how you would feel about that.

Look for experience and credentials

Just about anyone can call himself/herself a financial planner, and just about anyone does. That’s why other, more standard credentials are important. A business degree, such as an MBA, is a good thing. Some CPAs and attorneys specialize in financial planning. In addition, the designation CFP, which stands for certified financial planner, has become widely recognized as a mark of competency over the past several years. To attain the CFP, a planner must meet certain educational requirements, pass a fairly tough exam and then have a requisite amount of practical experience.

Toss the bad apples

Beyond having credentials, a financial planner (or his employer) should also be registered with the Securities and Exchange Commission. Find out by asking to see a candidate’s ADV (adviser) form. Anyone who professionally gives investment advice is required to provide such a form. It will provide you with lots of interesting information about the planner and his practice, such as how long he’s been in business, how many clients he has, and how much money he manages. It will also tell you about any disciplinary history for unethical conduct. Check, too, with the local Better Business Bureau (www.bbb.org) and the Certified Financial Planner Board of Standards (www.cfp.net) to make sure the planner isn’t prone to lapses of good judgment.

Stroll into the office

After you’ve gathered a list of planners who look clean on paper, it’s time to meet face to face. Schedule an initial appointment. There should be no charge. Although you’re no expert in the field, you can still get a pretty good sense as to whether a planner knows his stuff. Ask what sets a planner apart from other planners. Ask for his philosophy on money and whether he/she has a clearly defined strategy for financial success. As for investing, ask how he/she does it, and whether his choices in investments are based on hunches or on academic research.

Check out the bill

Be clear about how, and how much, a planner will charge you. Some financial planners charge by the hour, some will charge you a percentage of your assets “under management” and others will make money off commissions from the products they sell you. Many planners who do not sell products or take commissions (fee-only planners) feel that they can be more objective in the advice they give you, and in the investments they suggest for you. Commissioned planners argue that any honest planner would never be swayed by commissions into making bad investment choices. Like astronomers and astrologers, the two groups sometimes seem to hate each other, but there’s no reason that you need to pick sides.

“You want someone who is honest and really knows what he or she is doing; that matters much more than how that person is paid,” said Helen Salazar-Realini, a certified financial planner.

Is there chemistry

Financial planning is very much unlike, say, auto mechanics. It can get awfully personal at times. A competent planner working on your long-term financial goals should be asking you questions about your retirement dreams, your health and, perhaps, even the quality of your marriage and your relationship with your children and grandchildren. (Well, do you want them in your will or not?) If you’re going to be working with a planner for a long time, the two of you should click.

Russell Wild is both a financial journalist and a fee-only investment adviser based in Allentown, Pa.


To Catch a Terrorist

When Uri Tauber went to a party as a young man, before checking out the availability of girls or drinks, he would first compute in his mind how much dynamite it would take to blow up the place.

This unusual preoccupation stood Tauber in good stead while serving with an elite Israeli commando unit, after joining his country’s intelligence service, and now as a private anti-terrorism expert and consultant.

"To catch a terrorist, you have to think like a terrorist," he pointed out during an interview at the Canoga Park offices of The Chameleon Group, a full-service security organization founded and staffed by Israelis.

Tauber was in town to participate in the one-day Security Forum 2002, co-sponsored by Chameleon and the Israeli Economic Mission in Los Angeles.

The forum drew 170 officials, representing the FBI, sheriff, police and other law enforcement agencies, aerospace companies, port authorities, private security companies, and such diverse organizations as Amtrak, UCLA and the John Paul Getty Trust.

"There are some things Americans can learn from Israelis, not because we’re more intelligent but because, unfortunately, we have had more experience," said Tauber, a heavyset man of 51 wearing a turtleneck sweater and horn-rimmed glasses.

Through such bloody experience, Israelis have developed cutting-edge technology in the battle against terrorism.

An example, Tauber said, is a sophisticated computer and surveillance system to protect shopping malls and sports stadiums. The system integrates aerial photography, constant monitoring on the ground and simulation of worst-case scenarios with training and testing of security personnel.

The system is still evolving, but has been implemented at the Knesset in Jerusalem and other sites in Israel.

Just as important is to raise every citizen’s awareness level to terrorist threats, said Muky Cohen, Chameleon’s CEO, who helped found the 10-year-old company that now has operatives and training projects in Europe, Asia and Latin America.

"There are limits to what the police can do, so every trained eye is needed," said Cohen. "Citizens must know what to look for, as well as the risks they might encounter."

Complementing personal awareness is the need to enhance physical protection. "Every new Israeli apartment house must have a bomb shelter and an airtight room," Cohen said.

As problem solvers, Americans and Israelis bring different virtues to the battle against terrorism.

"Americans are better at organizing, and we are better at improvising," Tauber said.

When confronted with a problem, Israelis will say, "Let’s somehow fix it immediately," he noted. Americans tend to move more deliberately, looking first at the budget, then at likely liability and marketing possibilities, and only then fixing the problem.

Since Sept. 11, U.S. government agencies are learning to move faster, but most private firms are still lagging behind, Tauber said.

The first step in gauging the vulnerability of any potential target, from a private business to a government installation, is a threat analysis. "Where other people might see a fence, our job is to look for the holes in the fence," he said.