Many people calling themselves financial planners actually know little about planning, calculating net worth, analyzing cash flow or devising budgets. Certified financial planners are required to have a minimum of a bachelor's degree or more than five years of financial-planning experience. Many planners are registered as investment advisers with the Securities and Exchange Commission. While such registration makes public the planner's background, products and fee schedule, it does not really pass judgment on the professional competence of the planner. There are also planners who sell financial products, from which they derive commissions of 1 percent to 10 percent.
Many planners combine fees and commissions.
In all cases, the planner should carefully explain up front the fee or commission schedule. Every planner should also offer an initial free consultation to get acquainted. Use your initial visit to get acquainted with the planner, to see whether your personalities and goals match up, and to get an estimate of what a plan would cost. If you do become a client, expect a written plan that clearly states objectives and goals and gives specific recommendations for attaining them. A realistic plan for meeting your goals, which you have the personal option of following or not following.