Is it the right time for you to seek assistance from a financial planner?

It is actually kind of same for investing. When I feel lazy, I need a personal trainer to put me through an exercise routine, or if I want to build a house, I need an architect to draw me a blueprint. That’s why some of us seek the services of a financial planner.
Whether you lack the time to do a lot of research yourself or you feel the need for a professional opinion, financial planners can be convenient and helpful. But you don’t want to rush out and hire just anyone. Choosing a financial planner is much like hiring a personal trainer or an architect: it’s very personal, that is, it’s all about what you want, so you must consider many factors and know your criteria before hiring.
First impressions are important, and financial planners make their first impression by their designations: Their professional status is shaped by the kind of education they have, or the letters behind their names. Of course, the more letters there are, the more there is to indicate that the planner has extensive knowledge.
There are now many different types of certifications, and not all have the same importance or weight, so do make sure you know what the designations mean. Here are some of the most popular designations with a brief explanation of the education and expertise each designation signifies and the kind of work done by the professionals holding them.
Certified Financial Planner (CFP). This was first introduced in Thailand a couple of years ago via the establishment of the Thai Financial Planners Association (TFPA). Those with the CFP designation have demonstrated competency in all areas of finance related to financial planning. Candidates complete studies on more than 100 topics, including stocks, bonds, taxes, insurance, retirement planning and estate planning.
The programme is administered by the globally managed Financial Planning Standards Board (FPSB). In addition to passing the CFP certification exam, candidates must also complete qualifying work experience and agree to adhere to the CFP board’s code of ethics and professional responsibility and financial planning standards. A financial planner works with individuals to help them understand their options and make financial decisions suited to their personal financial situation and goals.
Chartered Financial Analyst (CFA). This designation is offered by the CFA Institute (formerly the Association for Investment Management and Research, or AIMR). To obtain the CFA charter, candidates must successfully complete three difficult exams and gain at least three years of qualifying work experience, among other requirements. In passing these exams, candidates demonstrate their competence, integrity and extensive knowledge in accounting, ethical and professional standards, economics, portfolio management and security analysis.
CFA charter holders tend to be analysts who work in the field of institutional money management and stock analysis, not financial planning. These professionals provide research and ratings on various forms of investments.
Chartered Financial Consultant (ChFC). This designation is administered by the American College of Financial Services. Individuals with ChFC certification have demonstrated vast and thorough knowledge of financial planning.
In addition to successful completion of an exam in areas of financial planning, including income tax, insurance, investment and estate planning, candidates are required to have a minimum of three years’ experience in a financial-industry position. Like those with the CFP designation, professionals who hold the ChFC charter help individuals analyse their financial situations and goals.
How meaningful are these letters? While certifications are not everything, you should give extra credit to those who have them. Most of these certifications require candidates to put in many hours of study and meet high ethical and professional standards.
That said, while the designations are hard-earned, such designations should only be one of your criteria when deciding on a financial professional. Most of us definitely consider brand reputation when we decide to buy a product. Similarly, you may want to look for a financial planner who has a long track record.
Typically, the financial planners who have been around for a long time with a good track record will cost more than the new graduates with little experience. That’s not to say that the new graduates can’t make you profits or help you save money, but they do pose more uncertainty.
Experience is always an asset, but a long track record is not worth much if it isn’t a good one. Make sure you find out whether your prospective financial planner has had many complaints, and if so, look into how he or she resolved them. You can look into the planner’s track record simply by asking him or her about it, but you can also find out more by searching through the TFPA’s records by yourself.
Independence is crucial, especially in Thailand, where most financial institutions do not embrace “open architecture” platforms and only sell in-house products. A financial planner working for a firm that only offer in-house products probably won’t encourage you to look at what another company offers.
A good financial planner should be occupied first with helping you make financial gains and not preoccupied by the obligation to make profits for a large mutual fund or insurance company. He or she should also have the ability to offer a fully comprehensive financial plan including retirement, education, tax, insurance and estate planning services.
Also, he or she must be transparent about his or her compensation schemes.
On average, a fee-only financial planner will charge you Bt30,000-Bt50,000 for a comprehensive financial plan, depending on the complexity of your personal circumstances. Once the plan is completed, you can either execute the plan yourself via your brokers or mutual funds/insurance agents, or your financial planner may act as an intermediary as well.
Your choice of financial planner will serve you best if you have a clear understanding of your needs and goals. You then need to tell him or her what you need.
While the meat of financial planning is typically the same everywhere, it’s the optional extras that make a difference. If you are single, then you probably do not need higher-education funding or life-insurance services.
Can your planner handle all of your investment accounts including offshore, or domestic accounts only? Make a list of exactly what you need from a financial professional and then determine whether he or she offers you the appropriate services for the price you would be paying.
Good luck.

nVira-anong C Phutrakul is managing director and head of retail banking at Citibank.