Questions for a Financial Planner

February 22, 2017

Man extending handLooking for a Financial Planner?  That person is different from an Investment Adviser. Generally, an Investment Adviser is someone in the business of advising others on investing in stocks, bonds, and other securities.  However, investing is just one of seven pieces of your financial picture, not a plan.

As the name ‘planner’ implies, financial planners assess the financial needs of individuals and help clients plan for short-term and long-term goals.  This covers a broad array of areas, including retirement, taxes, education expenses, estate needs, insurances, and investing. Financial Planners are teachers and strategists at heart. They are not just stock brokers or investment advisers.

Knowing that you want a plan – a blueprint for your financial future – what are the questions you should ask to determine if the person you’re meeting with is the right planner for you? We suggest the following:

  1. Does that person adhere to a fiduciary standard? The intent of this DOL regulation is to stop advisers from putting their own interest – earning high commissions and fees – ahead of a client’s interests. A fiduciary has a “duty to care” and must determine that an investment is in the client’s best interest, not merely “suitable”. Fiduciaries must avoid conflicts of interest and operate with full transparency. Not all financial advisers are fiduciaries. Is your meeting with a ‘stock broker’ or a long-range planner?
  2. Is the planner well versed in all aspects of a financial plan or do they specialize in only one area of planning? For example, a younger couple with children could have an interest in saving for college, insurances for family protection in addition to making their money grow. The planner’s strength might be in retirement planning. Perhaps not the best fit.
  3. Does the planner make himself available to answer any questions or concerns you might have throughout the relationship? Will you be meeting on a regular basis? A responsible financial planner is always available to guide and advise his clients so the best decisions are made. Find out if there is a charge for this service.
  4. What happens to your account if something occurs that means the planner can no longer continue helping you? A responsible financial planner should NEVER leave you scrambling to find a replacement. He should have a detailed succession plan in place with a team or individual who will continue to guide you with the same level of service you have come to expect.
  5. How is the Financial Planner compensated? Financial advisers who are registered with the SEC can provide you with a Form ADV that outlines their sources of income, but any financial adviser should be able to tell you whether they accept commissions, charge only fees, or charge fees and accept commissions.

You do your due diligence when selecting a physician or a realtor; be sure you invest at least the same time and care in selecting those who advise you on your finances.