The Advice Financial Planners Only Share with Their Siblings

When you are moving to a new state, you know you need to confirm your new adviser is a CFP (certified financial planner) or CFA (chartered financial analyst); and to avoid no-fee CFPs (if they aren't being paid by you, then they're probably earning a commission from insurance companies and mutual-fund firms whenever they sell their products, which is a definite conflict of interest). But you may not know to beware of other "alphabet soup" designations. According to Peggy Cabaniss, president of HC Financial Advisors, who has been an investment adviser for more than 25 years, if a potential adviser tells you, "I'm a CDP," that means they're a certified divorce planner—which is probably only significant if you're going through a divorce. Compared to brokers and investment advisers, financial planners are the least regulated group of financial professionals, so don't assume that a plethora of letters after a planner's name makes him or her extra qualified to advise you on general issues. Check the NAPFA or FPA websites, which have directories of fee-only financial advisers.