The questions below will help you interview and evaluate a financial planner to see if they are the right one for you. You will want to select a competent, qualified professional with whom you feel comfortable whose expertise and business style suits your financial planning needs. 1. What experience do you have? Find out how long the planner has been in practice and the number and types of companies with which they have been associated. Ask the planner to briefly describe past work experience and how it relates to their current practice. If your financial planner will be offering you investment advice, it is advisable to work with someone who has been through a recession or down stock market. 2. What are your qualifications? The term "financial planner" is used by many financial professionals. Ask what qualifies him to offer financial planning advice and whether he holds a designation such as the Certified Financial Planner or Chartered Financial Analyst marks. These professional designations show dedication to the profession and the ability to pass detailed examinations. 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 or licenses, check on his background with the NASD AIMR , SEC or other relevant professional organizations. 3. What services do you offer? The services a financial planner offers will depend on a number of factors including credentials, licenses and areas of expertise. Financial planners cannot offer 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. There are some planners who offer financial planning advice on a range of topics but are not licensed and do not sell financial products. Others provide advice only in specific areas such as estate planning or on tax matters. 4. Are you Independent of financial product sponsors? Product sponsors include stock brokerage firms (discount and full service), insurance companies and banks. Ask the financial planner about the type of clients and financial situations he or 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. Make sure the planners viewpoint on investing matches your own and is not too cautious or overly aggressive for you. Some planners require you to have a certain net worth before offering services. 5. Will you be the only person working with me? The financial planner may work with you himself or have others in the office assist with your activities. You can meet everyone who will be working on your investments or plan. If the planner works with professionals outside his own practice (such as attorneys, insurance agents or tax specialists) ask to get a list of their names to check on their backgrounds. 6. How will I pay for your services? As part of your financial planning agreement, be sure you see in writing how they will be paid for the services provided. Planners can be paid in several ways: a salary paid by the company for which the planner works. The planners employer receives payment from you in fees or commissions to pay the planners salary. fees based on an hourly rate, a flat rate, or on a percentage of your assets and/or income. commissions paid by a third party from the products sold to you to carry out the financial planning recommendations. Commissions are usually a percentage of the amount you invest in a product. a combination of fees and commissions whereby fees are charged for the amount of work done to develop financial planning recommendations and commissions are received from any products sold. 7. How much do you charge for your services? While the amount you pay the planner will depend on your needs, the financial planner should provide you with an estimate of possible costs based on the work to be performed. Such costs include the planners hourly rates, flat fees or the percentage he would receive as commission on products you may purchase as part of the financial planning recommendations. 8. How are you licensed? Many financial planners offer advice in securities or insurance when they are not licensed in these areas. Some states may not require licensing but consumers may want their advisor be properly regulated and licensed. Licensed persons pass examinations and have many hours of continuing education annually. However, there are some licensed advisors who are are merely salesmen in an advisors suit. Ask the planner to provide you with a description of her conflicts of interest in writing. For example, financial planners who are employees of banks, insurance companies or investment firms often favor their own company products, even when less competitive. The planner may also have relationships or partnerships that should be disclosed to you, such as business he or she receives for referring you to an insurance agent, stockbroker, accountant or attorney for implementation of planning suggestions. 9. Have you been publicly disciplined for any unlawful or unethical actions in your professional career? 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 or the state equivalent of that form. Many financial planners do not hold securities or insurance licenses. 10. Can I have it in writing? Before handing over any money, 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. Check List For Interviewing A Financial Planner Planner Name: _______________________________________ Company: _______________________________________ Address: _______________________________________ Phone: _______________________________________ Date: _______________________________________ 1. Do you have experience in providing advice on the topics below? If yes, please indicate the number of years. * Retirement planning ________ * Investment planning ________ * Tax planning ________ * Estate planning ________ * Insurance planning ________ * Integrated Planning ________ * Other________________________________________ 2. What are your areas of expertise and how do your qualifications in those areas compare to others?____________________________________________ __________________________________________________ 3. How long have you been offering financial planning advice to clients? * Less than one year * One to four years * Five to 10 years * More than 10 years 4. Briefly describe your work history: _______________________________________________
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_______________________________________________ 5. What are your educational qualifications? Give area of study.
Undergraduate Degree _________________________
Advanced Degree _____________________________
Other ______________________________________ 6. Which planning or investment management designation(s) do you hold? * Certified Financial Planner or CFP * Certified Funds Specialist (CFS) * Certified Public Accountant - Personal Financial Specialists (CPA-PFS) * Certified Senior Advisor (CSA) * Other_________________________________________ 7. How many financial planning related continuing education requirements do you fulfill? ______hours every______ 8. What licenses do you hold? * Insurance (Life, Health, Disability, Long Term Care) * Securities (NASD Series 7, 24, 63) * Other ______________________________________________________ 9. A. Are you personally licensed or registered as an Investment Adviser with the:? State(s)? _________________________________ Federal Government? If no, why not? _________________________________ B. Is your firm licensed or registered as an Investment Adviser with the: State(s)? _________________________________ Federal Government? If no, why not? _________________________________ C. Will you provide me with your disclosure document Form ADV or its state equivalent form? * Yes * No * If No, why not _________________________________________ 10. What services do you offer?
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_________________________________________________ 11. Describe your approach to financial planning.
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_________________________________________________ 12. A. Who will be working with me on my plan?
Planner __________________________________
Associate(s)_______________________________ B. Will the same individual(s) review my financial situation? * Yes * No * If no, who will? _________________________________________ 13. How are you paid for your services? * Fee * Commission * Fee and commission * Salary * Other________________________________ 14. What do you typically charge?
A. Fee:
Hourly Rate $_____@ hour
Flat fee (range) $_____ to $________
Percentage of assets under management _______ percent 15. A. Are you employed by any company whose products or services you recommend? * Yes * No * Explain _________________________________________ B. Can you implement the plan by making transactions for us or do we have to find a properly licensed person? * Yes * No Explain _________________________________________ C. Do professionals and sales agents to whom you may refer me to send business, fees or any other benefits to you? * Yes * No Explain _________________________________________ D. Are you regulated by the National Association of Securities Dealers (NASD)? * Yes * No E. Do you have oversight specifically for your insurance recommendations (i.e. licensed with the State Insurance Commissioner) * Yes * No Explain _________________________________________ 16. Do you provide a written client engagement agreement? * Yes * No Explain _________________________________________ |
