As the economy slowly recovers, some of us are finding that there is money again to spend and save.
So now what?
Should you buy a house? Take a trip to Europe? Squirrel your money away in case the recession returns for an encore performance?
Whatever you decide, a financial adviser can help you determine what goals are realistic and help you achieve them. Advisers can help you handle expensive life events like a divorce or sending your kid to college, or they can simply help you organize your finances as you prepare for the future.
But keep in mind that you're essentially asking a stranger to help you make your financial decisions.
Here are some tips to help you make sure hiring a financial adviser doesn't cost you more than just a service fee:
Know what a financial planner does.
Financial planners are not stockbrokers, accountants or insurance agents. They take a look at your finances and help you meet a specific goal — like retiring or buying a house. They don't do your taxes or give you trading advice.
Do your homework.
Anyone with a calculator can call himself or herself a "financial planner." Look for someone with experience and the right education.
Certified financial planners (CFPs) are the best and safest option because they have to pass a two-day exam and meet continuing education requirements.
"Other than credentials, interview them and find out who they are typically working with," said Kimberly Overman, a CFP and president of the Financial Well in Tampa. "If their average client is 35 years old versus 65 years old, the mind-set is going to be different."
Background checks can be done through such groups as the Financial Industry Regulatory Authority and the Financial Planning Association. If the planner is a CFP, you can look to see if he or she has any complaints on file.
Don't entrust your money to just anyone.
Financial advisers are paid either with a base fee, a commission or some combination of the two. Make sure you ask them how they get paid, Overman said. And not only should you find a price that works for you (this is about handling your money responsibly, after all), understand that a commission could mean your adviser may be tempted to take more risks with your money to generate more earnings.
As you research financial advisers, make sure you review the code of ethics they follow.
Not only are CFPs regulated, they must pass an ethics review and pledge to abide by the CFP Board's Financial Planning Practice Standards and Code of Ethics and Professional Responsibility.
Understand that you still have to manage your own personal finances.
Nobody likes balancing the checkbook, but hiring a financial adviser is not an excuse to completely hand over all of your monetary transactions.
The Financial Planning Association website lists all of the records and documents you should take to meetings with your financial adviser, including pay stubs, expense reports, tax returns and insurance policies.
So keep up that filing system!