For many, hiring a financial planner arises during change. Whether you are facing college for the kids, retirement, changes in your practice, or marriage or divorce, is it time? Financial planners address your entire financial picture by reviewing your net worth, goals, objectives, cash flow, investments, and needs. They crystallize and develop plans for your personal, family, and business goals.
Know your options
You need a plan and the right guide. Most financial planners are investment advisors, but not all investment advisors are financial planners. Your financial planner should assess every aspect of your financial life - savings, investments, insurance, taxes, retirement, and estate planning - and help develop a detailed strategy for meeting your financial goals.
Ask the right questions
The Certified Financial Planner Board of Standards developed the following questions to ask potential financial planners:
- What experience do you have? How long has the planner practiced? Get a description of his or her experience and how it relates to the current practice.
- What are your qualifications? Select a recognized specialist in financial planning - one who has undergone rigorous education and experience requirements such as CERTIFIED FINANCIAL PLANNER™, Chartered Financial Consultant, or Personal Financial Specialist.
- What services do you offer? Does the planner offer comprehensive advice on investments, insurance, retirement, estate planning, and taxes?
- What is your approach to financial planning? Who is a typical client? Do they require a minimum net worth? Also, ask if the planner will help carry out financial recommendations he or she makes for you.
- Will you be the only person working with me? Request to meet the entire team.
- How will I pay? Planners are compensated by: a company salary; a fee based on an hourly rate, flat rate or percentage of the assets, income, or both; a third-party commission from products sold to the client; or a combination of any of the above.
- How much do you charge? Get an estimate before work begins.
- Could anyone besides me benefit from your recommendations? To prevent conflicts, ask if the planner receives any compensation for referrals to other professionals (CPA, attorney, etc.).
- Have you ever been publicly disciplined for any unlawful or unethical actions in your professional career? Conduct a background check through the organization regulating the planner’s actions. Financial planners registered as investment advisors with the SEC or state securities agencies or who are associated with a company registered as an investment advisor must provide you with a disclosure form (Form ADV Part II or the state equivalent).
- Can I have a written agreement? Get a written agreement detailing the services that will be provided. Keep this document in your files for future reference.
Take action
Schedule an appointment. Mapping your financial future will give you the confidence, knowledge, and tools necessary to meet your goals.
Kathy B. Paal, MBA, CFP, RFC, CTFA Ms. Paal is a certified financial planner at Heritage Financial Consultants in Hunt Valley, Md., and is an investment advisor representative, registered representative, and licensed insurance broker with Lincoln Financial Advisors Corporation, a registered investment advisor and broker-dealer (307 International Circle, Suite 390, Hunt Valley, MD, 21030, (410) 771-5655). E-mail Kathy at [email protected].
