Frequently Asked Questions
10 Questions To Ask When Choosing A
Financial PlannerBy: Nick Kondra, CFP™
You may be considering seeking help from a financial
planner for a number of reasons, whether it’s
deciding to buy a new home, planning for retirement
or your children’s education, or simply not having
the time or expertise to organize your finances. Whatever
your need, working with a financial planner can be a
helpful step in securing your financial future. The
questions below have been prepared to help you choose
the financial planner who’s right for you.
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 he or she has been associated. Ask the planner to describe
his work experience and how it relates to his current financial planning
practice. Choose a planner who has a minimum of three years’ experience
counseling individuals on their financial needs.
2. What are your qualifications?
The term “financial planner” is used by
many financial professionals. Ask the planner what qualifies
her to offer financial planning advice and whether she
holds a financial planning certification such as the
CERTIFIED FINANCIAL PLANNER™ or CFP™ marks.
3. What services do you offer?
The services financial planners offer depend on a number
of factors including their credentials, licenses
and areas of expertise. Financial planners cannot
sell insurance or securities products such as mutual
funds or stocks without the proper licenses, or
give investment advice in most states unless registered
with state or federal authorities.
4. What is your approach to financial planning?
Ask about the type of clients and financial situations
the planner typically works with. Some planners
prefer to develop one plan by bringing together
all of your financial goals. Others provide advice
on specific areas, as you may need it. Ask the
planner if he requires you to have a certain net
worth before working with you and if he will implement
financial recommendations or refer you to others.
5. Will you be the only person working with me?
The financial planner may work with you alone or be
assisted by others. You may want to meet everyone
who will be working with you. If the planner works
with professionals outside her own practice, get
a list of their names to check backgrounds.
6. How will I pay for your services?
As part of your financial planning agreement, the financial
planner should clearly tell you in writing how
he will be paid for the services to be provided.
Planners can be paid in several ways including
salary, fees, commissions or a combination of these
methods.
7. How much do you typically charge?
While the amount you pay the planner will depend on
your particular needs, the planner should be able
to provide you with an estimate of possible costs
based on the work to be performed.
8. Could anyone besides me benefit from your recommendations?
Ask the planner if she has business relationships or
partnerships that could affect her professional
judgment while working with you. 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 other business relationships
or partnerships that should be disclosed to you.
9. Have you ever 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), the Securities and Exchange Commission (SEC),
your state insurance and securities departments, and
the CFP Board keep records on the disciplinary history
of financial planners and advisers. Ask which organizations
the planner is regulated by and contact those groups
for disciplinary information.
10. Can I have it in writing?
Ask the planner for a written agreement detailing the
services that will be provided. Keep this document
in your files for future reference.
Nick Kondra, CFP™, is a financial planner with
Investment Professionals, Inc. and specializes
in providing objective client oriented advice.
Information in this article is based on a brochure
provided by the Certified Financial Planner Board
of Standards. For a free copy of this brochure,
contact the CFP Board at 888-CFP-MARK or www.CFP.net.
Founded in 1985, the CFP Board is a nonprofit certifying
organization that owns the CFP certification marks
and benefits the public by fostering professional
standards in personal financial planning.