Finding a planner requires research

Q: My husband and I have tried to find a good certified financial planner in our area, but we don’t know what to look for.

We met briefly with one planner who taught an adult education class on finance, but she seemed to be really pushing one particular brand of annuity investment and we wondered if it was ethical for her to be using such a class to generate business.

After that experience, I checked our local Yellow Pages and phoned a financial planner — who proceeded to tell me that the Yellow Pages wasn’t a good way to find a financial planner.

We are in our late 30s, own our own home, have no credit card debt, always have something in savings and put the maximum in our 401(k)s each year. We feel that we are in good shape compared with many of the people we know. But we’re not sure that’s enough to position us for a secure retirement. Do you have any advice that will help us find a reputable financial planner in our area?

A:You’re right to question the first planner’s ethics, and not just because she was using her class to drum up clients. The fact that she was pushing annuities without first spending a lot of time gathering detailed information about your financial situation tells us that she’s more interested in her potential commission than in your financial well-being.

The second planner had a point, but you have to wonder why he bothered to place the ad in the first place.

The conventional wisdom is that you should ask friends and neighbors for referrals, but chances are they don’t use a planner — or they may have one who is fleecing them or who is incompetent, and they don’t know it.

The real problem for people in your situation is that many of the best, brightest and most objective financial planners restrict their practice to “high net worth” individuals — in other words, the rich.

Many require their clients to have a minimum amount of investable assets, often $250,000 or more outside of workplace retirement plans.

It’s also common for these planners to charge a percentage of your assets, rather than a flat or hourly fee, which can be an expensive way to go if your need for financial planning is relatively limited.

Still, there are fee-only financial planners out there that specialize in middle-income clients. Some are part of the Garrett Planning Network ( www.garrettplanningnetwork.com), a relatively new organization that was formed to address the gaping need for affordable financial planning.

You also can contact organizations that represent financial planners, such as the Financial Planning Association and the National Association of Personal Financial Advisors, for referrals to their members who offer hourly or flat-rate planning.

In addition, contact the Certified Financial Planner Board of Standards for its free resource kit for consumers, which includes “What You Should Know About Financial Planning,” “10 Questions to Ask When Choosing a Financial Planner” and “Your Rights as a Financial Planning Client.”

You can get the kit at www.cfp.net or by calling (888) 237-6275.

Obviously, you’ll need to do some legwork to find the right planner. Good luck in your quest.