Whether you're saving for retirement or your children's college fund or wondering how best to make the most of your money, financial planners say they can help consumers set and reach achievable goals.
But consumers would be wise to first do some research of their own -- on financial planners.
Most planners carry a designation awarded by a college, board or association, each of which sets its own standards for education, experience and ethics.
For instance, there are certified financial planners, chartered financial analysts, chartered financial consultants and accountants, among other types of advisers. They can do everything from setting up a one-time investment to managing a client's money over many years.
Consumers use such services to figure out how to meet long- and short-term goals. Planners offer retirement planning, investment planning and estate planning, among other specialties.
Some specialists charge an hourly fee, while others sell financial products and charge a commission. Others charge a management fee, based on a percentage of the value of assets managed. Planners often charge a combination of fees and commissions. Educational background and experience can vary widely, as can specialties within the financial planning field.
"We stress that it's important to educate yourself about what you want your money to do for yourself, then sit down with a potential planner and discuss it," seeing if that person's style and personality fit your needs, said Kathy Valentine, a spokeswoman for the Association for Investment Management and Research, a Charlottesville, Va., group that awards a designation known as chartered financial analyst. "And talk to more than one."
Says Susan Farmer, a spokeswoman for the Society of Financial Service Professionals, "You want to find out if that person offers services you require, and you want to make sure you trust the person. You will have to reveal personal information."
Also, she said, "you want to make sure your financial planner can follow through. As your needs change, your plans should be revisited."
Consumers should check references from clients and other professionals, and review one of the planner's completed plans, the Bryn Mawr, Pa.-based professional society advises. The society urges consumers to walk away from a planner who promotes only his or her own financial products.
The society's members are mainly chartered financial consultants. That designation, bestowed by the American College, also in Bryn Mawr, means that a professional has successfully completed 10 courses at the college, fulfilled an ethics requirement and has at least three years of qualifying experience in the industry, Farmer said. Chartered financial consultants work in nine specialty areas, the largest of which are retirement planning and estate planning for individuals and businesses, she said.
Consumers often don't realize that certified public accounts also offer financial planning services, said Joel Allegretti, a spokesman for the American Institute of Certified Public Accountants.
About a third of the institute's members also have a personal financial specialist credential. Before they can apply for that, a CPA must have at least three years' experience in any of six areas of financial planning: risk management, the personal financial planning process, personal income tax planning, investment planning, retirement planning and estate planning.
One organization, the National Association of Personal Financial Advisers, advocates that planners charge fees, not commissions. Its members hold a variety of designations but never sell products, said Gary Schatsky, chairman of NAPFA and a New York-based, fee-only adviser and attorney.
"The case to be made is, you wouldn't think of going to a lawyer if there was a commission involved," Schatsky said. "This field has developed a surprising tolerance for sales. Over 90 percent of financial advisers are salespeople focused on the products they sell."
Most professional organizations will refer consumers to members in a given area, either over the Internet or by phone.
No federal agency regulates financial planners and few states do. But activities that planners perform, such as offering investment advice or selling securities or insurance, are regulated by federal and state government agencies.
But why go through all the time and trouble of trying to sort through designations and qualifications? Why hire a financial planner at all?
"It has a great deal to do with giving direction, having some sort of plan to work with," said Carol Lampe, sole proprietor of Lampe Asset Management of Pittsburgh and a board member of the Atlanta-based International Association for Financial Planning.
"We ask the questions that bring out the goals or needs the client hasn't thought of," Lampe said. "And once there's a plan in place, it can be followed and then rechecked for accuracy and revised if necessary. It takes the guessing out of the picture as to whether there's enough money to retire or whether investments are in the right vehicles."
Lampe said she tends to specialize in retirement planning and investment or portfolio management. "It's gotten where it's important to [specialize] because there's so much to know and so many niches," she said.
In the case of her own clients, "It has evolved to focus on retirement planning because the clients I began with are starting to retire," Lampe said.
"They've stayed with me, to the age where you do need to do retirement planning and know how to live on the money you've saved."