You may be considering help from a financial planner for a number of reasons, whether its deciding to buy a new home, planning for retirement or your childrens education, or simply not having the time or expertise to get your finances in order. Whatever your needs, working with a financial planner can be a helpful step in securing your financial future.
The questions in this brochure will help you interview and evaluate several financial planners to find the one thats right for you. You will want to select a competent, qualified professional with whom you feel comfortable, one whose business style suits your financial planning needs. An interview checklist has been included for your convenience.
A. Find out how long the planner has been in practice and the number and types of companies with which she has been associated. Ask the planner to briefly describe her work experience and how it relates to her current practice. Choose a financial planner who has experience counseling individuals on their financial needs.
2. What are your qualifications?
A. The term "financial planner" is used by many financial professionals. Ask the planner what qualifies him to offer financial planning advice and whether he is recognized as a Certified Financial Planner™ professional or CFP® practitioner, a Certified Public Accountant/Personal Financial Specialist (CPA/PFS), or a Chartered Financial Consultant (ChFC). Look for a planner who has proven experience in financial planning topics such as insurance, tax planning, investments, estate planning or retirement planning. Determine what steps the planner takes to stay current with changes and developments in the financial planning field. If the planner holds a financial planning designation, check on his background with the CFP Board or other relevant professional organizations.
3. What services do you offer?
A. The services a financial planner offers depend on a number of factors including credentials, licenses and areas of expertise. Generally, financial planners cannot sell insurance or securities products such as mutual funds or stocks without the proper licenses, or give investment advice unless registered with state or Federal authorities. Some planners offer financial planning advice on a range of topics but do not sell financial products. Others may provide advice only in specific areas such as estate planning or on tax matters.
4. What is your approach to financial planning?
A. Ask the financial planner about the type of clients and financial situations she typically likes to work with. Some planners prefer to develop one plan by bringing together all of your financial goals. Others provide advice on specific areas, as needed. Make sure the planners viewpoint on investing is not too cautious or overly aggressive for you. Some planners require you to have a certain net worth before offering services. Find out if the planner will carry out the financial recommendations developed for you or refer you to others who will do so.
5. Will you be the only person working with me?
A. The financial planner may work with you himself or have others in the office assist him. You may want to meet everyone who will be working with you. If the planner works with professionals outside his own practice (such as attorneys, insurance agents or tax specialists) to develop or carry out financial planning recommendations, get a list of their names to check on their backgrounds.
6. How will I pay for your services?
A. As part of your financial planning agreement, the financial planner should clearly tell you in writing how she will be paid for the services to be provided.
Planners can be paid in several ways:
7. How much do you typically charge?
A. While the amount you pay the planner will depend on your particular needs, the financial planner should be able to provide you with an estimate of possible costs based on the work to be performed. Such costs should include the planners hourly rates or flat fees or the percentage he would receive as commission on products you may purchase as part of the financial planning recommendations.
8. Could anyone besides me benefit from your recommendations?
A. Some business relationships or partnerships that a planner has could affect her professional judgment while working with you, inhibiting the planner from acting in your best interest. Ask the planner to provide you with a description of her conflicts of interest in writing. For example, financial planners who sell insurance policies, securities or mutual funds have a business relationship with the companies that provide these financial products. The planner may also have relationships or partnerships that should be disclosed to you, such as business she receives for referring you to an insurance agent, accountant or attorney for implementation of planning suggestions.
9. Have you ever been publicly disciplined for any unlawful or unethical actions in your professional career?
A. Several government and professional regulatory organizations, such as the National Association of Securities Dealers (NASD), your state insurance and securities departments, and the CFP Board keep records on the disciplinary history of financial planners and advisers. Ask what organizations the planner is regulated by, and contact these groups to conduct a background check. All financial planners who have registered as investment advisers with the Securities and Exchange Commission or state securities agencies, or who are associated with a company that is registered as an investment adviser, must be able to provide you with a disclosure form called Form ADV Part II or the state equivalent of that form.
10. Can I have it in writing?
A. Ask the planner to provide you with a written agreement that details the services that will be provided. Keep this document in your files for future reference.
1. Do you have experience in providing
advice on the topics below?
3.a. How long have you been offering
financial planning advice to clients?
b. How many clients
do you currently have?
6. What financial planning designation(s)
do you hold?
b. Is your firm licensed or registered as an Investment Adviser with the:
c. Will you provide
me with your disclosure document Form ADV Part II or its state equivalent
10. What services do you offer? _________________________________________________
b. Will the same
individual(s) review my financial situation?
13. How are you paid for your
15. a. Do you have a business affiliation
with any company whose products or services you are recommending?
16. Do you provide a written
client engagement agreement?
Certified Financial Planner
Board of Standards, Inc.
North American Securities
National Association of
National Association of
Securities Dealers Regulation
National Fraud Exchange
Securities and Exchange
Financial Planning Association
National Association of
Personal Financial Advisors
American Institute of
Certified Public Accountants / Personal Financial Planning Division
Society of Financial Service
CFP Board's Web site, www.CFP.net/learn, is a comprehensive resource for financial planning, offering useful information for visitors at every stage of the financial planning learning curve. Interactive tools provide help for your personal situation, including changing jobs, managing debt, planning your retirement and more. Join the eNewsletter for updates and check back regularly to participate in polls and quizzes.
The information in this brochure is provided as a public service by Certified Financial Planner Board of Standards Inc. (CFP Board). A nonprofit, professional regulatory organization, CFP Board fosters professional standards in personal financial planning so that the public values, has access to and benefits from competent and ethical financial planning.
The U.S. Securities and Exchange Commission's Office of Investor Education and Assistance has reviewed this publication. The SEC does not endorse the commercial activities, products or members of this or any other private organization.
It's your future. Plan it!SM is a service mark owned by Certified Financial Planner Board of Standards Inc.
This publication may be reprinted for educational and nonprofit purposes only.
Financial Planner Board of Standards
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