How to Find a Financial Planner

(MoneyWatch)  Has the economy got you thinking it's time to find a financial planner to help you navigate these difficult times? Or replace the one you've already got?
It's never a bad idea to bring in a pro, provided you find someone who's honest and qualified. If there's one lesson we all learned after Bernard Madoff's Ponzi scheme was exposed, it's that even the most sophisticated investors can get taken. So make sure you're very careful when choosing a financial planner.

Don't know where to begin? Here are some guidelines:

• Start asking people you trust. Get recommendations from your friends, family members and advisors such as your accountant or estate planning attorney. Try to get at least three names and then schedule an informational interview with each to ask questions of the planners during the meetings.
• For a list of reputable local planners, contact the Certified Financial Planning Board of Standards, the Financial Planning Association, the National Association of Personal Financial Advisors and the Paladin Registry.
• Don't pay too much. Many fee-only financial planners charge 1-2 percent of your assets annually. Others charge by the hour. According to the Garrett Planning Network, a typical fee-only planner charges between $150 and $300 an hour and a basic financial plan can take about 10 hours. Ask whether the planner also charges commissions and, if so, what the rates are.
• Watch out: Anyone can call himself a financial planner. (And anyone can cold-call you! Trust me, I know from experience. Glorified salespeople from my bank and brokerage firm are constantly calling to get me to buy new investment products.) If you want someone to manage your portfolio and make sure you're on target to reach your financial goals, look for folks who are certified financial planners or certified public accountants with the "personal financial specialist" certification.
• Do a background check. Just because your neighbor loves her advisor doesn't mean the planner is on the up and up. Check out the Certified Financial Planner Board of Standards' website to search for disciplinary actions against one of its members. You can also log onto finra.org, an independent regulator of securities firms, and use its BrokerCheck tool to check out the credentials of brokers and brokerages.
• Finally, diversify your investments. In this case, I'm not talking about simply making sure your portfolio has a nice mix of stocks and bonds. You may also want to spread your assets among multiple financial planners. This way, should you pick a dud, you haven't put all of your money at risk.