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10Questions to AskWHEN CHOOSING
A FINANCIAL PLANNER
CERTIFIED FINANCIAL PLANNER
BOARD OF STANDARDS, INC.
Q&A
You may be considering 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 get your finances in order.
Whatever your needs, working with a
financial planner can be a helpful step in
securing your financial future.
It’s your future. Plan it!®
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The questions in this brochure will help you interviewand evaluate several financial planners to find theone that’s right for you. You will want to select acompetent, qualified professional with whom youfeel comfortable, one whose business style suits yourfinancial planning needs. An interview checklisthas been included for your convenience.
Q WHAT EXPERIENCE DO YOU HAVE?
A Find out how long the planner has been inpractice and the number and types of compa-nies with which she has been associated. Askthe planner to briefly describe her work experi-ence and how it relates to her current practice.Choose a financial planner who has experiencecounseling individuals on their financial needs.
Q WHAT ARE YOUR QUALIFICATIONS?
A The term “financial planner” is used bymany financial professionals. Ask the plannerwhat qualifies him to offer financial planningadvice and whether he is recognized as aCERTIFIED FINANCIAL PLANNERTM professional or CFP®
practitioner, a Certified Public Accountant/Personal Financial Specialist (CPA/PFS), or aChartered Financial Consultant (ChFC). Lookfor a planner who has proven experience infinancial planning topics such as insurance,tax planning, investments, estate planning orretirement planning. Determine what stepsthe planner takes to stay current with changesand developments in the financial planningfield. If the planner holds a financial planningdesignation or certification, check on his back-ground with CFP Board or other relevantprofessional organizations.
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QUESTIONS
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Q WHAT SERVICES DO YOU OFFER?
A The services a financial planner offersdepend on a number of factors includingcredentials, licenses and areas of expertise.Generally, financial planners cannot sellinsurance or securities products such asmutual funds or stocks without the properlicenses, or give investment advice unlessregistered with state or Federal authorities.Some planners offer financial planningadvice on a range of topics but do not sellfinancial products. Others may provideadvice only in specific areas such as estateplanning or on tax matters.
QWHAT IS YOUR APPROACH TO FINANCIAL PLANNING?
AAsk the financial planner about the type ofclients and financial situations she typicallylikes to work with. Some planners prefer todevelop one plan by bringing together allof your financial goals. Others provide adviceon specific areas, as needed. Make sure theplanner’s viewpoint on investing is not toocautious or overly aggressive for you. Someplanners require you to have a certain networth before offering services. Find out if theplanner will carry out the financial recommen-dations developed for you or refer you toothers who will do so.
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QWILL YOU BE THE ONLY PERSONWORKING WITH ME?
A The financial planner may work with youhimself or have others in the office assist him.You may want to meet everyone who will beworking with you. If the planner works withprofessionals outside his own practice (such asattorneys, insurance agents or tax specialists)to develop or carry out financial planning recommendations, get a list of their namesto check on their backgrounds.
WHATEVER YOUR
NEEDS, WORKING
WITH A FINANCIAL
PLANNER CAN BE
A HELPFUL STEP IN
SECURING YOUR
FINANCIAL FUTURE.
6Q HOW WILL I PAY FOR YOUR SERVICES?
AAs part of your financial planning agreement,the financial planner should clearly tell you inwriting how she will be paid for the servicesto be provided.
Planners can be paid in several ways:
� A salary paid by the company for which theplanner works. The planner’s employerreceives payment from you or others, eitherin fees or commissions, in order to pay theplanner’s salary.
� Fees based on an hourly rate, a flat rate, oron a percentage of your assets and/or income.
� Commissions paid by a third party from theproducts sold to you to carry out the financialplanning recommendations. Commissions areusually a percentage of the amount youinvest in a product.
� A combination of fees and commissionswhereby fees are charged for the amount ofwork done to develop financial planning recommendations and commissions arereceived from any products sold. In addition,some planners may offset some portion of thefees you pay if they receive commissions forcarrying out their recommendations.
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QHOW MUCH DO YOU TYPICALLY CHARGE?
AWhile the amount you pay the planner willdepend on your particular needs, the financialplanner should be able to provide you withan estimate of possible costs based on thework to be performed. Such costs shouldinclude the planner’s hourly rates or flat feesor the percentage he would receive as com-mission on products you may purchase as partof the financial planning recommendations.
QCOULD ANYONE BESIDES ME BENEFITFROM YOUR RECOMMENDATIONS?
A Some business relationships or partnershipsthat a planner has could affect her profes-sional judgment while working with you,inhibiting the planner from acting in yourbest interest. Ask the planner to provide youwith a description of her conflicts of interestin writing. For example, financial plannerswho sell insurance policies, securities ormutual funds have a business relationshipwith the companies that provide these financial products. The planner may also haverelationships or partnerships that should bedisclosed to you, such as business she receivesfor referring you to an insurance agent,accountant or attorney for implementationof planning suggestions.
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QHAVE YOU EVER BEEN PUBLICLY DISCIPLINED FOR ANY UNLAWFUL OR UNETHICAL ACTIONS IN YOUR PROFESSIONAL CAREER?
A Several government and professional regulatoryorganizations, such as the National Associationof Securities Dealers (NASD), your stateinsurance and securities departments, and CFPBoard keep records on the disciplinary historyof financial planners and advisers. Ask whatorganizations the planner is regulated by andcontact these groups to conduct a backgroundcheck. (See listing at right.) All financial plannerswho have registered as investment adviserswith the Securities and Exchange Commissionor state securities agencies, or who are associ-ated with a company that is registered as aninvestment adviser, must be able to provideyou with a disclosure form called Form ADVPart II or the state equivalent of that form.
Q CAN I HAVE IT IN WRITING?
AAsk the planner to provide you with a writtenagreement that details the services that willbe provided. Keep this document in your filesfor future reference.
Certified Financial Planner Board of Standards, Inc.888-237-6275 • www.CFP.net/search
North American Securities AdministratorsAssociation202-737-0900 • www.nasaa.org
National Association of Insurance Commissioners816-842-3600 • www.naic.org
National Association of Securities Dealers Regulation800-289-9999 • www.nasdr.com
National Fraud Exchange (fee involved)800-822-0416
Securities and Exchange Commission202-942-7040 • www.sec.gov
Financial Planning Association800-282-7526 • www.fpanet.org
National Association of Personal Financial Advisors888-333-6659 • www.napfa.org
American Institute of Certified PublicAccountants/Personal Financial Planning Division888-999-9256 • www.aicpa.org
Society of Financial Service Professionals888-243-2258 • www.financialpro.org
TO CHECKthe Disciplinary History of a
Financial Planner or Adviser
TO FINDa Financial Planner in Your Area
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CFP Board's Web site, www.CFP.net/learn, is acomprehensive resource for financial planning,offering useful information for visitors at everystage of the financial planning learning curve.Interactive tools provide help for your personalsituation, including changing jobs, managingdebt, planning your retirement and more. Jointhe eNewsletter for updates and check back regu-larly to participate in polls and quizzes.
The U.S. Securities and Exchange Commission’s Office of InvestorEducation and Assistance has reviewed this publication. The SECdoes not endorse the commercial activities, products or membersof this or any other private organization.
The information in this brochure is provided as a public serviceby Certified Financial Planner Board of Standards Inc. (CFP Board).A nonprofit, professional regulatory organization, CFP Boardfosters professional standards in personal financial planning sothat the public values, has access to and benefits from competentand ethical financial planning.
It‘s your future. Plan it!® is a service mark owned by CertifiedFinancial Planner Board of Standards Inc.
This publication may be reprinted for educational and nonprofitpurposes only.
1670 Broadway, Suite 600, Denver, Colorado 80202-4809
Consumer Toll-free Number: 888-CFP-MARK (888-237-6275)
P: 303-830-7500
F: 303-860-7388
W: www.CFP.net/learn
CERTIFIED FINANCIAL PLANNER
BOARD OF STANDARDS, INC.
Copyright ©1997-2004,Certified Financial Planner Board of Standards Inc. All rights reserved.
LEARN About Financial Planning Online
Planner Name: ____________________________________Company: ________________________________________Address: __________________________________________Phone: ______________________ Date: ______________
Do you have experience in providing advice onthe topics below? If yes, indicate the number of years.
� Retirement planning ________________________� Investment planning ________________________� Tax planning ______________________________� Estate planning ____________________________� Insurance planning ________________________� Integrated planning ________________________� Other ______________________________________
What are your areas of specialization? What qualifies you in this field?
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
a. 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
b. How many clients do you currently have?� Less than 10 clients � 10 to 39� 40 to 79� 80 +
Briefly describe your work history.________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
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CHECKLIST for Interviewing a Financial Planner
What are your educational qualifications? Give area of study.
� Certificate__________________________________� Undergraduate degree ______________________� Advanced degree ___________________________� Other ____________________________________________________________________________________
What financial planning designation(s) orcertification(s) do you hold?
� CERTIFIED FINANCIAL PLANNERTM certification� Certified Public Accountant/Personal Financial
Specialist (CPA/PFS)� Chartered Financial Consultant (ChFC)� Other ______________________________________
What financial planning continuing educationrequirements do you fulfill? _________ hours every _________
What licenses do you hold?� Insurance � Securities� CPA� J.D. � Other ______________________________________
a. Are you personally licensed or registered as aninvestment adviser representative with a state(s)?:
� Yes � NoIf no, why not?________________________________
b. Are you or your firm licensed or registered as aninvestment adviser with the:
� State(s)?____________________________________� Federal Government?If no, why not?________________________________
c. Will you provide me with your disclosure document Form ADV Part II or its state equivalent?
� Yes � NoIf no, why not?________________________________
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What services do you offer? ____________________________________________________________________________________________________________________________________________________________________
Describe your approach to financial planning.________________________________________________________________________________________________________________________________________________
a. Who will work with me?� Planner� Associate(s) ________________________________
b. Will the same individual(s) review my financial situation?
� Yes � NoIf no, who will? _______________________________
How are you paid for your services? � Fee� Commission� Fee and commission� Salary� Other ______________________________________
What do you typically charge?a.Fee:
Hourly rate $ _________Flat fee (range) $ _________ to $ _________Percentage of assets under management_________ percent
b. Commission:What is the approximate percentage of theinvestment or premium you receive on: stocksand bonds _________ ; mutual funds _________ ;annuities _________ ; insurance products_________ ; other _________
a. Do you have a business affiliation with anycompany whose products or services you are recom-mending?
� Yes � NoExplain _______________________________________________________________________________________
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b. Is any of your compensation based on selling products?� Yes � NoExplain _______________________________________________________________________________________
c. Do professionals and sales agents to whom youmay refer me send business, fees or any other benefits to you?
� Yes � NoExplain _______________________________________________________________________________________
d. Do you have an affiliation with a broker/dealer?� Yes � No
e. Are you an owner of, or connected with, anyother company whose services or products I will use?
� Yes � NoExplain _______________________________________________________________________________________
Do you provide a written client engagementagreement?
� Yes � NoIf no, why not? _______________________________________________________________________________________________________________________________________________________________________________
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1670 Broadway, Suite 600, Denver, Colorado 80202-4809
Consumer Toll-free Number: 888-CFP-MARK (888-237-6275)
P: 303-830-7500
F: 303-860-7388
W: www.CFP.net/learn
Copyright ©1997-2004,Certified Financial Planner Board of Standards Inc. All rights reserved.
CERTIFIED FINANCIAL PLANNER
BOARD OF STANDARDS, INC.
