The first and most important things you should explore are the advisor’s values. If you’re frugal, are they? Do you drive a used Accord but he/she pulls up in a new BMW? If you see great disparity in values, find someone else.

Second, the fee versus commission is completely overblown and if you do the math you’ll see the problems with it. The Mutual Fund Store, Fidelity, Vanguard, etc. are all pushing fee based accounts where they manage the portfolio for you. The fees usually start at 1.50% and go down from there. Compared to a low cost load fund, it’s not even close in expenses…the commission fund destroys the fee based account. Personally, I like the hourly fee for the occassional consultation route for do-it-yourselfers. For the less confident/knowledgeable/inclined/etc., a long-term relationship with an advisor is more appropriate.

Of course, one of the critical questions to ask is “How many accounts do you manage and how many clients do you service?” I’ve seen advisors that handled over 1,000 clients and several thousand accounts. Personally, I never went past about 60 clients. That gave me about 4 business days annually with each person. Remember, there are only 220 or so business days so you’ll want to be sure the advisor can handle your business with the appropriate amount of attention.

Switching gears a bit, if you put yourself out there as a financial advisor, charge fees, and aren’t registered, you will have a fine levied against you and risk jail time. This is completely false that anyone can pass themselves off as financial planner/adviser/advisor. You must be licensed with a firm in good standing. Granted, you can say you’re an advisor, but I can also say that I’m a doctor.

As for the credentials, they help, but not as much as you might think. The CFP is a lengthy course, but it’s not a pre-req for good advice. In fact, I have a few problems with some of their ideology, but I digress. The reality is that I’ve met many CFPs that were as slick as the slickest of used car salesmen. The designation just means they’ve passed a test and will get slapped harder on the wrist if they screw up.

Again, the most important questions relate to values, total cost, availability, and service history. I would not work with an advisor unless they’ve been in it for five years or more, are properly licensed, have a clean CRD report, and were agreeable to my personality.

Sorry for the long comment, but I think advisors get knocked far more than is necessary. The web will put the bad advisors out of business soon enough;-)

Nice look at a very touchy subject for all “us” financial planners.

One thing to consider on your first line “Think about that for a second… anyone can call himself (or herself) a financial planner.” I don’t think that this is entirely correct. I’m not sure if this is an industry regulation or just brokerage firm specific, but unless you actually have the CFP credentials you are technically not allowed to refer to yourself as a “financial planner”. You can call yourself financial “advisor” or “consultant”, but not a planner. Both firms I have worked were very adamant about this. Trivial to most, but my guess that this was implemented to protect those that actually put the time and effort to receive the designation.

That being said, if you meet with a somebody that refers to themselves as a “financial planner” and doesn’t have the credentials to back it up (Hint: Look at their business card and look for CFP after name), make sure to buy whatever they’re selling. NO! Casually excuse yourself and run the other way very fast.

Personally, I’m working toward my CFP designation, and my company does not sell a single product. It is based on the concept of providing guidance and advice as opposed to making a profit on commissions or a % of assets managed. I’ve written multiple articles on my own blog about financial advising, and the truth is, it does take more than a few letters after a name to be a good advisor. Independence, transparency, the ability to listen rather than throw together a plan, and other intangible qualities are just as important.

Also, IARs are by definition fiduciaries, so once again being a fiduciary isn’t a sufficient condition of being a good financial planner.

When should someone get a financial planner?