Sniffing Out The Financial Planner For You

Most Web sites are paid ads, and those that aren't are tough to use

The time has come: You need a financial plan, and you want a professional to do it. So you fire up your browser and turn to the Web. With all the investing resources available on the Internet, you'll have no trouble finding detailed referrals to locate that one adviser who can best handle your special needs--right?

Wrong. Enter "financial planner" in your search engine, and you'll find at least a half-dozen Web sites promising to match you up. But none of these offerings provides all the tools you need to find the money manager or planner who's right for you. In choosing an adviser, it seems the World Wide Web can't yet replace your local network of family, friends, and financial providers.

Online financial matchmaking got a big boost when Microsoft recently announced plans to get into the business. Its new site ( promises to simplify the daunting search by linking investors with advisers who are prescreened by Dalbar, a Boston investment-research firm. Answer 15 questions about your location, finances, and planning needs, and presto!, a list of five local advisers appears.

The problem, critics say, lies in Microsoft's promise to screen its advisers. What is that screen? Microsoft charges each adviser $1,500 to be included and requires a clean regulatory record for five years. Some planners say that's not nearly enough to bar devious or unqualified advisers. "There's no minimum threshold for education or competency," says Mike Chasnoff, president of Advanced Capital Strategies in Cincinnati, who declined to enlist. "It was: `You've been in business five years and you haven't been thrown in jail.' "

Microsoft says its standards at least offer would-be clients a preliminary screening. That beats "a typical way of finding an adviser, which is opening the Yellow Pages," says Ed Graczyk, the lead project manager for Microsoft's MSN MoneyCentral.

But a sophisticated ad, whether it's on the Web or in the phone book, doesn't guarantee a sophisticated planner. (, for example, asks in-depth questions, but dig into the site and you find there are only six advisers to draw from--all mutual-fund managers. ( offers the most thorough questionnaire, but it couldn't match me with a planner, apparently because it lists only about a dozen of them nationwide.

Other sites are difficult to use. (, which charges planners $1,200 a year to be listed, came up blank using both Netscape and Internet Explorer browsers. (The company concedes that its page doesn't work with Netscape.) The only way we could get in was via America Online. And then, the roster was meager, with only two names for all of New York State.

GUIDANCE GAPS. To avoid sites that offer mainly paid listings, you could visit one of three financial-planning associations. But their search tools are weak. The National Association of Personal Financial Advisors (, whose members don't take commissions on sales of financial products, lets you sort planners only by location. The largest group, Institute of Certified Financial Planners (, offers lots of names but the only info it gives about them besides their addresses is that they have met the standards to become a CFP. At the International Association of Financial Planners (, a search for Baltimore turned up more than 1,500 advisers--some as far away as Massachusetts. But the IAFP's profiles do offer lots of data on planners' experience and compensation. ICFP and IAFP will merge on Jan. 1. The groups can't yet say how their new Web site will work.

Even if you find leads on the Net, you'll need to do standard due diligence. When you meet prospective advisers, first see if you're comfortable. "At least 50% of the equation is: `Are you simpatico?"' says NAPFA Chairman Gary Schatsky, president of IFC Personal Money Managers in New York. The other 50% entails how prospective advisers are compensated, their credentials, and what services they provide.

Check with the Better Business Bureau and your state attorney general or securities regulators. Finally, be sure to ask prospective planners for Securities & Exchange Commission Form ADV, Parts 1 and 2, which details how a planner is paid and whether he or she has been subject to legal or regulatory action. You'll need to get the form directly from the planner. Like most of the info you need to pick an adviser, it's just not available on the Web.

Before it's here, it's on the Bloomberg Terminal.