Investment Advisors are in the business of giving advice about securities to clients. For instance, individuals who receive compensation for giving advice to a specific person on investing in stocks, bonds, or mutual funds, are Investment Advisors. Some Investment Advisors manage portfolios of securities.

Most Financial Planners are Investment Advisors, but not all Investment Advisors are Financial Planners. Some Financial Planners assess every aspect of your financial life--including saving, investments, insurance, taxes, retirement, and estate planning--and help you develop a detailed strategy or financial plan for meeting all your financial goals.

Others call themselves Financial Planners, but they may only be able to recommend that you invest in a narrow range of products, and sometimes products that aren't securities. Before you hire any financial professional, you should know exactly what services you need, what services the professional can deliver, any limitations on what they can recommend, what services you're paying for, how much those services cost, and how the adviser or planner gets paid.

Here are some of the questions you should always ask when hiring any financial professional:

• What experience do you have, especially with people in my circumstances?
• Where did you go to school? What is your recent employment history?
• What licenses do you hold? Are you registered with the SEC, a state, or the NASD?
• What products and services do you offer?
• Can you only recommend a limited number of products or services to me? If so, why?
• How are you paid for your services? What is your usual hourly rate, flat fee, or commission?
• Have you ever been disciplined by any government regulator for unethical or improper conduct or been sued by a client who was not happy with the work you did?

For registered Investment Advisors, will you send me a copy of both parts of your Form ADV?

Be sure to meet potential advisers "face to face" to make sure you get along. And remember: there are many types of individuals who can help you develop a personal financial plan and manage your hard–earned money. The most important thing is that you know your financial goals, have a plan in place, and check out the professional you chose with your securities regulator.

Before you hire any financial professional--whether it's a stockbroker, a Financial Planner, or an Investment Advisor--you should always find out and make sure you understand how that person gets paid. Investment Advisors generally are paid in any of the following ways:

• A percentage of the value of the assets they manage for you;
• An hourly fee for the time they spend working for you;
• A fixed fee;
• A commission on the securities they sell; (through BD affiliate) or
• Some combination of the above.

Each compensation method has potential benefits and possible drawbacks, depending on your individual needs. Ask the Investment Advisors you interview to explain the differences to you before you do business with them, and get several opinions before making your decision.

Depending on their size, Investment Advisors have to register with either the SEC or the state securities agency where they have their principal place of business. For the most part, Investment Advisors who manage $25 million or more in client assets must register with the SEC. If they manage less than $25 million, they must register with the state securities agency in the state where they have their principal place of business.

Most Investment Advisors must fill out a form called "Form ADV." They must file their ADVs with either the SEC or the state securities agency in the state where they have their principal place of business, depending on the amount of assets they manage.

The ADV consists of two parts. Part I contains information about the adviser's education, business, and whether they've had problems with regulators or clients. Part II outlines the adviser's services, fees, and strategies. Before you hire someone to be your Investment Advisor, always ask for, and carefully read, both parts of the ADV. If an Investment Advisor won't give you Part I of the ADV, don't do business with them.

You can get copies of Form ADVs from the Investment Advisor, your state securities regulator, or the SEC, depending on the size of the adviser. You can find out how to get in touch with your state securities regulator through the North American Securities Administrators Association, Inc.'s Web site or by calling (202) 737-0900. Ask your state securities regulator whether they've had any complaints about the adviser, and ask them to check the CRD.

For all SEC licensed Advisors, Part 1 of the ADV is available online and Part 2 is available from the State regulators as well as from the individual advisor.

If the professional you're considering claims to be a "Certified Financial Planner" (CFP), you should also visit the website of the Certified Financial Planner Board of Standards to see if the professional is licensed as a CFP and whether the professional's license has been suspended or revoked by the Board. You can also call the Board at (888) 237-6275 to obtain other disciplinary information about the professional.

While some Investment Advisors and Financial Planners have credentials like CFP (Certified Financial Planner) or CFA (chartered financial analyst), they are not required to by federal or state laws. Unlike federally registered advisers, many states do require their advisers and representatives to pass a proficiency exam or meet other requirements.

Investment Advisors and Financial Planners may come from many different educational and professional backgrounds. Before you hire a financial professional, be sure to ask about their background. If they have a credential, ask them what it means and what they had to do to earn it.

Also find out what organization issued the credential, and then contact the organization to verify whether the professional you're considering did, in fact, earn the credential and whether the professional remains in good standing with the organization. You can find out the different types of testing and other requirements on the website of the North American Securities Administrators Association.