Peggy S. Cabaniss, the new president of the National Association of Personal Financial Advisors, came to visit me this week. I'm a big fan of NAPFA advisers (our style here is "adviser" with an "e") because they work on a fee-only basis and seem to provide truly objective advice.
In addition, NAPFA advisers have to fulfill 60 hours of continuing education coursework every two years. (The typical certified financial planner only needs 30 hours of study every two years.) They are required to study more touchy-feely topics like counseling and communication, which helps advisers deal with the more emotional side of financial planning. NAPFA members also sign an oath saying the adviser puts the client's needs first and won't accept compensation or other remuneration that is contingent on a client's purchase or sale of a financial product.
Overall, NAPFA advisers are an upstanding group--I liken them to the Boy Scouts of the financial planning industry. The problem is that there are only 1,300 NAPFA members nationwide, which means it can be hard to find an adviser to work with in your hometown. Here in New York City, for example, the NAPFA members typically cater to high-net worth clientele. So when my not-so-rich friends ask me for an adviser referral, I have a hard time offering up names.
Realizing that demand exceeds supply, NAPFA has put together a checklist to find an adviser as well as a more lengthy Financial Planning Diagnostic to help investors find advisers. I recommend checking out both of these before you hire a financial adviser/advisor, consultant, or broker.