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Ask the tough questions up front. You should interview your financial planner before letting him or her take care of your investing matters. This is a person that will be working for you, and you want to make sure you get the best qualified professional possible. Here are some things you want to ask... What experience do you have? Find out how long the planner has been in practice and the number and types of companies with which she has been associated. Choose a financial planner who has a minimum of three years experience counseling individuals on their financial needs.
What is your approach to financial planning? Ask about the planners values and approach to Socially Responsible Investing. Probe and ask specific questions about what they think of issues that are important to you. Ask if they invest their own money in socially responsible investments. Ask the financial planner about the type of clients and financial situations she typically likes to work with. Make sure the planner's viewpoint on investing is not too cautious or overly aggressive for you.
What are your qualifications? Ask the planner what qualifies him to offer financial planning advice and whether he holds a financial planning designation such as the Certified Financial Planner mark. Look proven experience in financial planning topics such as insurance, tax planning, investments, estate planning or retirement planning. Ask how the planner stays current with changes and developments in the financial planning field. If the planner holds a financial planning designation, check on his background with the CFP Board or other relevant professional organizations.
What services do you offer? The services a financial planner offers depend on a number of factors including 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 unless registered with state or Federal authorities. Some planners offer financial planning advice on a range of topics but do not sell financial products. Others may provide advice only in specific areas such as estate planning or on tax matters.
Will you be the only person working with me? The financial planner may work with you himself or have others in the office assist him. You may want to meet everyone who will be working with you. If the planner works with professionals outside his own practice (such as attorneys, insurance agents or tax specialists) to develop or carry out financial planning recommendations, get a list of their names to check on their backgrounds.
How will I pay for your services? As part of your financial planning agreement, the financial planner should clearly tell you in writing how she will be paid for the services to be provided. Planners can be paid in several ways, a salary, fees, commissions or a combination of these.
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How much do you typically charge? While the amount you pay the planner will depend on your particular needs, the financial planner should be able to provide you with an estimate of possible costs based on the work to be performed. Such costs would include the planner's hourly rates or flat fees or the percentage he would receive as commission on products you may purchase as part of the financial planning recommendations.
Could anyone besides me benefit from your recommendations? Some business relationships or partnerships that a planner has could affect her professional judgment while working with you, inhibiting the planner from acting in your best interest. Ask the planner to provide you with a description of her conflicts of interest in writing. 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 relationships or partnerships that should be disclosed to you, such as business she receives for referring you to an insurance agent, accountant or attorney for implementation of planning suggestions.
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), 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.
Can I have it in writing? 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.
To Check the Disciplinary History of A Financial Planner or Adviser:
- Certified Financial Planner Board of Standards:
888-CFP-MARK
- North American Securities Administrators Association:
888-84-NASAA
- National Association of Insurance Commissioners:
816-842-3600
- National Association of Securities Dealers:
800-289-9999
- National Fraud Exchange (fee involved):
800-822-0416
- Securities and Exchange Commission:
800-732-0330
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