Interesting that this would come up now, as locally we have a guy getting sued for somewhere between 10.5 possibly up to 50 million. [www.tennessean.com] The guy actually has a building at the local university named after him, but his gift to the school was actually somebody else's investment.

We had someone in Charleston, SC basically used everyones investments to support his lifestyle. Later checked into the hospital and claimed he had amensia. [www.charleston.net]

Or don't hire a financial planner, and just follow Scott Adams's (Dilbert) 9 point financial plan:

1) Make a will
2) Pay off your credit cards
3) Get term life insurance if you have a family to support
4) Fund your 401k to the maximum
5) Fund your IRA to the maximum
6) Buy a house if you want to live in a house and can afford it
7) Put six months worth of expenses in a money-market account
8) Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirement
9) If any of this confuses you, or you have something special going on (retirement, college planning, tax issues), hire a fee-based financial planner, not one who charges a percentage of your portfolio.

From "Way of the Weasel".

The best advice I've ever gotten is to find someone knowledgeable (and successful, e.g. not in debt) who doesn't benefit financially from the advice they give you. That's the only way you know they're not "selling" you something.

Other than that, I ask my planners for their last 3 years of tax returns. It's pretty easy to tell how they're doing and what they're investing in themselves.

I use a fee-only financial planner. This means that I pay him a fee based on my total assets, and that's it. There are no fees hidden in the investments. He provides advice and directs my investment portfolio but I actually make the transactions with the accounts. So there is no question of where he makes his money, and whether his advice is paying for itself by investment income/growth.

I think people don't like a fee-only situation because it is unpleasant to hand over thousands of dollars to someone, but you are doing the same thing with any financial planner, they just are collecting it in hidden ways.

I had a bad experience with an Ameriprise planner (big shock, I know). The first few meetings went OK -- we were only discussing my investment options, I was learning about long-term planning, nothing was going to be decided or signed right away, etc. 10 minutes into the next meeting, out came a two-inch thick stack of papers for me to sign, getting me started in the Ameriprise-branded investment plans, purchasing specialized life insurance investment products, and more things than I could count.

I managed to get out of my connection with Ameriprise with nothing more out of pocket than a couple of hundred bucks for my up-front consulting fee (and I considered myself lucky, having read some horror stories of other folks who waited until after their entire investment portfolio was tied up). I do consider it a good learning experience, both from the few things I did pick up in those first meetings, and from the life lessons in how it all came to an end.

This is probably good advice for consumer life in general!

@CreativeLinks: This is good advice in general, but if you are not comfortable with investments, it definitely pays to hire a financial planner. They can chart everything out for you and figure out how much you should be saving every month to meet, say, a retirement need. Look for someone with the CFP designation; it's a rigorous process that separates the people selling something from those who take a long term approach. Fee-based is probably the way to go, as their interests are aligned with yours. Yes, they take about 1% of your portfolio each year, but if you have a large account, that is negotiable. Remember, you get what you pay for.

For those who cannot/will not follow Scott Adam's excellent 9 steps, a good place to start is to hire a fee-only planner. Requesting disclosure of and then understanding any conflicts of interest should always be doe with any financial professional.

I always wondered, what are the educational requirements to be a CFP?

Like how many hours or how many classes or the number of classes needed, how much time does it take?

I see so many certified financial planners, that the requirements got me curious? Is it similiar in requirements to say being a real estate agent?

Funny about Ameriprise and their tactics, 2 days ago I got a call from an agent "calling me back" regarding my interest in financial planning info. I had never called or expressed any interest in dealing with them. What I think happened is they trolled the career builder website and got my information from there as I had just a few hours earlier updated and reposted my resume for a few positions. I'm debating whether to call him and ask, how did I request info from Ameriprise.

Something to be aware of for those of use posting resumes online, they troll!

Re CFP requirements, it is a 2 year course involving all the aspects of financial planning, including investments, estate planning, insurance issues, ethics and others. You must pass the course by taking a two-day examination, have three years experience in some related job, do continuing education, and don't violate any laws or ethics to use the CFP designation.

How do you go about finding a good financial planner to begin with? Maybe you guys could do a post about that as a follow-up to this one?

@PLANNERKENT

Thanks, I never understood how it quite worked.

A 2 year course, that sounds pretty brutal. Is that full time study or part time?

Getting a real estate licience was easy, I took a 45 hour class, passed and then took the state exam, I thought CFP was similiar to that (number of hours, pass class, have sponsor, pass exam).

Is there any excelerated versions?

The CFP course is part time, can be done by correspondence through the College for Financial Planning, and is offered by many colleges also as an on-site course. I think you can "challenge" the test earlier than the two years, but most don't, and if you are working and have a life, it's hard to do that much studying and take it early.
As to finding a good planner, call a few, talk to them, have an introductory talk with the ones who sound as if they provide what you need. With a bit of work, some common sense, and your eyes wide open, you should find what you need. Most planners are happy to tell you what services they provide and what they charge. It helps if you have a good idea what level of advice you want. Do you just need to open an IRA, or do you need a comprehensive financial plan and asset management?