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HOW TO SELECT A FINANCIAL PLANNER
What should I do before starting the financial planning process?
It is important before you begin to look for a financial planner and launch a financial plan that you know what you want. Determine your general financial goals and/or specific needs (insurance policy analysis, estate planning, investment advice, college tuition financing, etc.) to better focus your search for a suitable financial planner. Also, be prepared. Read personal finance publications to maximize your familiarity with financial planning strategies and terminology.
What should I look for in a financial planner?
Look for a financial planner who…
Where should I look for a CFP professional?
· References from family, friends or other professionals you work with, such as an accountant or attorney, for references or referrals
· Call the FPA national’s toll-free number at 1-800-282-PLAN (7526) and ask for a list of CFP professionals in your area
· Access FPA of Houston’s PlannerSearch to find a CFP professional in your area.
What should I do before the meeting?
Once you have selected a few CFP professionals, schedule meetings with each one to interview them. Many offer an introductory meeting at no cost. Prior to the meeting, request a written disclosure document from the financial planner called a Form ADV. Also, do a background check on each planner. Depending on the financial planner's area of expertise, call the securities or insurance departments in your state regarding each planner's complaint record. Call the CFP Board toll-free at 888-CFP-MARK or check its Web site at www.CFP-Board.org to determine if a planner is authorized to use the CFP certification marks or has ever been publicly disciplined by the CFP Board.
What should I do at the introductory meeting?
The goal during the meeting is to obtain information. Here is a list of suggested questions to ask a planner:
- What is your business philosophy?
- How long have you been practicing financial planning? What did you do prior to becoming a financial planner?
- What is your area of specialty?
- Do you have a working relationship with other professionals? Can you provide references?
- What professional affiliations do you maintain?
- How will you incorporate my particular situation into the financial planning process?
- How do you prepare a plan? How extensive is it?
- Do you personally research products you recommend?
- How often will we meet as a result of my situation?
- How are you compensated for your various services? Are there are outside incentives or bonuses to be gained by you making certain recommendations?
After asking these questions, if you feel you need more information, don’t hesitate to ask for it. And, in addition to the information you have already gathered, ask the professional if he or she would like to add any details. After all, this person will play an integral role in helping you achieve your life goals.
What should I do once I have selected a financial planner?
Request a written advisory contract or engagement letter to document the nature and scope of services the planner will provide. You should also understand whether compensation will be fee or commission-based, or a combination of both.
Financial planning relationships are quite often long-term. Review your professional relationship on a regular basis and ensure that your financial planner understands your goals and needs as they develop and change over time.
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