The standards that cover financial advisers are getting tougher, and that's good for people who need help managing their money but don't know where to turn.
Most recently, the Certified Financial Planner Board of Standards proposed a new rule requiring anyone holding their CFP designation to assume fiduciary responsibility to clients. If the rule is adopted, which could happen later this year, it would mean that advisers carrying a CFP designation were legally bound to put their clients' interests above their own.
That would put them in contrast to many brokers who now can serve as fee-charging advisers but are not considered fiduciaries. They have their own standards to meet, but they are less rigorous.
Separately, the Federal government has been screening consumer debt advisers. Many credit counseling firms have lost their nonprofit status, and others, deemed to meet certain federal standards, have been listed at a Justice Department Web site.
It all adds up to a consumer-rewarding trend. People should be able to find a better level of advice -- or at least a safer level of advice -- than they may have received in the past. But finding the right adviser is still no cakewalk. Even honest financial advisers can overcharge or may not be particularly good at their jobs.
The trick for savers, spenders, taxpayers and investors is to find the adviser who fits your questions. Here's a rough guide.
-- If you have debt problems, seek a nonprofit credit counseling firm. Start at the National Foundation for Credit Counselling (http://www.debtadvice.org). You can also see a list of the Justice Department's approved agencies at http://www.usdoj.gov/ust. That list was created for consumers who are headed for bankruptcy, but the listed agencies do have to meet certain standards.
-- If you have tax questions. Find an expert in tax law, and look for someone who works with clients like you. Check the National Association of Enrolled Agents (http://www.naea.org) or the National Association of Tax Professionals (http://www.natptax.com.
-- If you want to know how to invest your 401(k) or IRA. Many people want investment advice, but allocating a retirement fund isn't the brain surgery some advisers might suggest. Many companies and advisers can do this. First, ask at the office, as your company might offer financial advice free as an employee benefit. If you have an IRA at a major no-load mutual fund company, like Fidelity Investments (http://www.fidelity.com) or T. Rowe Price (http://www.troweprice.com), note that those companies offer reasonably priced retirement investment advice.
-- If you want someone to answer a few questions, or set you up and walk away, go for a fee-only, by-the-hour planner. You can find them at the Garrett Planning Network, (http://www.garrettplanningnetwork.com).
-- If you want a lot. If you want someone to give you a lifetime plan for paying for college, funding retirement and meeting emergencies, or to continue managing your money, the best place to go for a full-service financial planner remains the National Association of Personal Financial Advisors (http://www.napfa.org). Full members must commit to comprehensive financial advisory services, fiduciary responsibilities and fee-only structures. Finding an adviser with a CFP designation (http://www.cfp.net/search/) is also a sign that you're getting someone with significant training, but it will be better once the new fiduciary standard is adopted.
Screen a few advisers to find one you'll like working with, and check references, too. The federal government offers a checklist of questions for financial advisers and also offers links to other financial planning Web sites at http://www.pueblo.gsa.gov/cic_text/money/financial-planner/10que stions.html#checklist.