Everything You Must Know Before Hiring

a Financial Planner

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Everything You Must Know Before Hiring a Financial Planner

Copyright © 2012.

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any

means, electronic or mechanical, including photocopying, recording, or by any information storage

and retrieval system, without written permission from the author, except for the inclusion of brief

quotations in a review.

Printed in the United States of America

For more information, visit:

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LEGAL NOTICES

The information presented herein represents the view of the author as of the date of publication. Because of the rate with

which conditions change, the author reserve the right to alter and update his opinion based on the new conditions. This

book is for informational purposes only. While every attempt has been made to verify the information provided in this

book, neither the authors nor their affiliates/partners assume any responsibility for errors, inaccuracies or omissions. Any

slights of people or organizations are unintentional. You should be aware of any laws which govern business transactions

or other business practices in your country and state. Any reference to any person or business whether living or dead is

purely coincidental.

Every effort has been made to accurately represent this product and its potential. Examples in these materials are not to

be interpreted as a promise or guarantee of earnings. Earning potential is entirely dependent on the person using our

product, ideas and techniques. We do not purport this as a “get rich scheme.”

Your level of success in attaining the results claimed in our materials depends on the time you devote to the program,

ideas and techniques mentioned your finances, knowledge and various skills. Since these factors differ according to

individuals, we cannot guarantee your success or income level. Nor are we responsible for any of your actions.

Any and all forward looking statements here or on any of our sales material are intended to express our opinion of

earnings potential. Many factors will be important in determining your actual results and no guarantees are made that you

will achieve results similar to ours or anybody else’s, in fact no guarantees are made that you will achieve any results from

our ideas and techniques in our material.

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Table of Contents

LEGAL NOTICES ................................................................................................................................. 3

Need Some Money Advice? .................................................................................................................. 5

Types of Financial Planners .................................................................................................................. 6

Knowing What You Want & Where to Go ............................................................................................. 8

Things to Consider First ........................................................................................................................ 9

The Initial Meeting ............................................................................................................................... 11

How much do Financial Planners Cost? ............................................................................................. 13

Questions to Ask Your Financial Planner ............................................................................................ 15

Conclusion .......................................................................................................................................... 17

Checklist of Questions to ask a Financial Planner .............................................................................. 18

Next Steps .......................................................................................................................................... 19

Recommended Resources.................................................................................................................. 20

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Need Some Money Advice?

Maybe you already have a financial plan outlined, and you just need someone to help you follow it. Or

maybe you’re wondering how to fit a new investment into that plan. Maybe you’ve never even thought

of creating a financial plan before, and are wondering why you need one. On the other hand, you do

know that you’re not the greatest with money, and you know that you could use a little help when it

comes to managing yours. In any of these cases – and so many more – you need a financial planner.

The range of services that a financial provider, or financial advisor, can provide varies from one

planner to another. And the one that you’ll end up hiring will depend on your own financial needs, and

what you’re looking for out of one. But before you start calling around (or even finding out who to call

around to,) let’s take a look at some of the things a financial planner can do for you, and how they can

help.

A financial planner will help you outline specific financial goals that you have for yourself, and show

you how to achieve those goals. Want to save for your child’s education? A financial planner can help

you do that. Want to build up a nice little retirement fund for yourself? A financial planner can help you

do that too. Want to build your estate, or find out how to reduce your taxes, just by making

investments you’d already be making? A financial planner will show you how. Just about anything that

you could want out of your financial life, a financial planner can help you get there.

Once you understand the benefits a financial planner can bring, it’s then time to figure out what kind

of financial planner you need. There are some financial planners that cover just about every area of

financial planning; but keep in mind that these planners may also not be as familiar with your specific

situation as a planner that’s designated as an expert. So before you even start calling around, you

need to know what kind of financial planner you need to hire, and what the differences are between

them.

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Types of Financial Planners

You have to be very careful when you go about hiring a financial planner, as it’s currently an industry

that doesn’t have a lot of regulation. In short, anyone can print up some business cards, call

themselves a financial planner, and then get a hold of your most personal financial information.

This however, doesn’t mean that you need to rely on just asking the planner and relying on a “feeling”

you get when they answer. There are different financial planner designations, in which a planner must

go through years of extensive training and study, as well as take different tests and exams before

they receive their designation certificate.

There are six designations in total for financial planners. You need to make sure that your planner

falls into at least one category and has at least one designation. Also keep in mind that a financial

planner may have a designation, but that designation does not limit them to just that area. They will

still be able to handle your other financial needs as well. So you don’t need to worry about running

around trying to find a different planner for every aspect of your life. Their designation simply refers to

the area of specialty that they have within the field of financial planning. The following six

designations of financial planners are:

CFP (Certified Financial Planner)

This designation refers to a financial planner that is registered with the Certified Financial Planner

Board of Standards. In order to be certified with the Board, a financial planner must have a certain

level of education and experience; and they must also pass a national test that’s written and overseen

by the CFP Board of Standards. CFPs have also sworn to a code of ethics outlined by the CFP

Board of Standards.

This type of financial planner may be the type you’re looking for if you have many different areas of

finance that you need covered, if you just need a general financial plan and help getting there, or if

you don’t really know what you’re looking for – you just know that you need help finding it!

ChFC (Chartered Financial Consultant)

In order to be a ChFC, an individual must take an exam and verify certain experience requirements

before they are given that title by the American College at Bryn Mawr. This post-secondary institution

is sponsored by the insurance industry, and the designation as such is the one the industry bestows

upon financial planners.

While sponsored by the insurance industry, ChFCs are familiar and knowledgeable with all types of

financial matters and can help you with any situation you may have. Like the CFP, it’s a broad

designation used to include many types of financial planners, with expertise on a number of subjects.

CLU (Chartered Life Underwriter)

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A CLU, like a ChFC, is also trained and designated by the American College at Bryn Mawr however

these planners are trained and specialize specifically in insurance matters. These planners must also

take an exam to receive their designation and while it will incorporate general financial planning

questions, it will mostly focus on insurance issues.

CFA (Chartered Financial Analyst)

The Institute of Chartered Financial Analysts is the institute that awards this designation after a

financial planner has taken an exam and passed a series of requirements.

These financial planners need to be extremely familiar and focused on things like portfolio

management, security analysis, financial accounting, and economics. If you’re looking to invest and

are wondering which area of your portfolio you should be looking at to do it, a CFA will be able to help

you.

AICPA/PFP (American Institute of Certified Public Accountants/Personal Financial Planning

Specialist)

This designation is handed out by the American Institute of Certified Public Accountants and in order

to obtain it, CPAs (Certified Public Accountants) must show related experience and education in the

field and must pass a financial planning exam overseen by the Institute.

These individuals will also be able to help you with a wide variety of financial situations and

circumstances. Because they are also accountants however, they will be specialized in things like tax

laws and filing, as well as retirement funds and other types of investing.

RIA (Registered Investment Advisor)

RIAs are an interesting bunch, because they don’t actually have to have any financial planning

experience or education. However, this is a designation that certifies that the individual has been

registered with the Federal Securities and Exchange Commission as an investment advisor. So these

are the professionals to seek out when you need help with investing in things like stocks and bonds.

And although it’s not a requirement that RIAs have financial planning experience and education, most

often times they do.

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Knowing What You Want & Where to Go

Before you start scribbling down questions for your planner and organizing all of your paperwork,

there are a few things you need to consider first before you actually meet with any financial planners.

And before you even start collecting names of potential financial planners for you, you’ll need to

consider two things: what you want and need out of your planner; and where you’re going to find one.

The first part of that is pretty simple, and a quick review of your own finances will tell you what you’re

looking for out of your financial planner. And the chances are that you already know. Do you feel as

though you’re wasting possible profits by not investing in the stock market? Do you feel you’re losing

money out on taxes, but you don’t know where or how to stop it? Or do you just need a financial plan

laid out for you, and then help sticking to it? A financial planner will be able to help you with all and

any of these; but again, you need to make sure that you know what you want out of them so that you

can find the right planner for you. That takes care of knowing what you want; how do you go about

actually finding some names that might help you?

The best way to start gathering names of financial planners is to start asking around. Word of mouth

is definitely the way to go here, and resources like the Yellow Pages or going online should only be

used as a last resort, if at all. As covered earlier, it doesn’t take much for a person to start calling

themselves a financial planner and if you go into the arrangement dealing with someone who’s not

properly trained or educated, you could risk losing it all. But, when it comes to the people that you ask

for a referral, you need to be careful there too.

Only trust people you already know that deal with finances every day and are slightly knowledgeable

about the world of finance and investing. While of course, the person that refers you doesn’t need to

be nearly as knowledgeable about personal finance as your planner does, they do need to have a

certain level of education about it. Only that way will you receive referrals to some of the best financial

planners out there.

That being said, some of the best people to ask for a referral to a good financial planners are: tellers,

supervisors, and customer service representatives at your bank; your mortgage broker; your

insurance broker; your accountant; the institution that currently holds your investments, or anyone

else you know and trust when it comes to matter of finance.

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Things to Consider First

After you’ve talked to all the experts you know and have a list of potential financial planners, you can

then start contacting the individual planners and finding out a little more about them. This can be

done over the phone, and you don’t need to go into extensive detail about every bank account you’ve

ever had, or the exact events that have led up to your current financial situation. And you also don’t

need to grill the planner; now is not the time to pull out the checklist of questions found in the back of

this report. What you do need to do is find out a few key pieces of information so that you know

whether or not it’s worthwhile continuing on with this financial planner.

Credentials

There is no real college level of education required to be a financial planner, but you should look for

someone who has some degree of education in some type of financial field, whether it’s accounting,

business finance, or a financial consultant or advisor certificate or diploma.

Also ask right away how long the financial planner has been working in the industry. Don’t just ask

how long they’ve been operating or working at their current business, ask about their entire financial

career. Also ask about their certifications and designations within the industry. Remember, you want

a planner that has at least one of the six designations discussed earlier.

Affiliation

This type of affiliation is different than being a member of a college or being registered with a board,

as is the case when you’re referring to designations. With this type of affiliation, you need to know

who the financial planner is working for; and this is very important.

You need to make sure that the planner is not an employee and not working directly for one particular

bank, lender, trading company, or other financial firm. This is because if they are, they are likely only

going to promote one, or a handful, or products and services, and those might not be the best one for

you. These individuals are working for their employer, and not you, and therefore do not have your

best interests at heart.

However, you do have to make sure that the financial planner has some sort of affiliation with brokers

and dealers, such as insurance brokers. This is because when planners have these relationships with

brokers, they can get you the best deal and offer you ideas, plans, and goals that are right for your

situation – and they’ll help you get them too. Without these types of networking systems, a financial

planner may be able to give you advice on where you should go in your financial plans and how to get

there, but they won’t be able to do much more than that.

Licensed

Don’t just make sure that your financial planner has a designation and is either registered or licensed

with an education establishment or board of experts and professionals. While those things are

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important, there’s a whole other side to a financial planner than just how much they know about the

world of finance – they’re also running a business, and you need to make sure it’s a legitimate one. If

they have their own small firm, make sure that you ask about their business license. If it’s a larger

firm, look around the building when you go for your initial consultation and see if their business

license is posted anywhere – it should be.

Once you’ve gotten these formalities out of the way, and know that no matter who you choose,

they’re qualified and licensed; and you’ve chatted with them for a few minutes to get a feeling of

whether you feel comfortable with them, it’s then time to whittle down your list to a few financial

planners to meet. There’s a lot that will take place at the first meeting and you need to make sure that

you’re prepared.

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The Initial Meeting

You may be a little intimidated about the thought of meeting with your financial planner for the first

time. And it’s no wonder, you’re about to reveal some of your most personal information and really let

a stranger in to some of the most intimate aspects of your life. That’s something that’s bound to be a

little scary to anyone!

But there’s no need to worry. The right financial planner is there to be your friend and work on your

side to get you to the financial place in life that you want to be. If you meet with any financial planner

during this time when you’ll be meeting with a few, don’t worry. You’ll know soon enough into that first

meeting that it’s not the right planner, and then you needn’t go any further. Just be on your way and

find that planner that you can talk to. Once you find them, what can you expect to talk about?

Mostly, your financial planner will use this time and this meeting to get to know you and to better

understand your financial situation and what your goals are. Bring to this meeting anything that will

help the planner get a better understanding of your situation and what you need. This includes

portfolio paperwork, bank statements, retirement savings account statements, property titles and

deeds, insurance papers, and anything else relevant to your current financial situation. While you

may feel odd handing this type of information over, remember that the planner needs it to really

understand if they can help you, and it’s information you’ll be sharing with them later on.

Be prepared to talk about investing, even if it’s something that you don’t do. Think about how you feel

about the stock market, mutual funds, and other types of investments. Do you want your money out

there working for you, and you want to make as much as possible in as little time as possible? Or do

you worry about the security of your money, and feel better having it in a place where you know it’s

safe? Be prepared to relay these feelings to your financial planner during this first meeting.

If you are currently investing or you think that it’s something that you’re interested in, also be

prepared to talk about what kind of investing you want to do, and how much you expect to gain from

it. If you have investments already, be ready to talk about how those investments have done and

what you think you’ve done right/wrong in the world of investing so far.

Also discuss during this first meeting what it will be like when you and the planner start working

together. How often will you speak to each other? Will those meetings be in person or over the

phone? Will the planner come to you or will you have to go to them? Can you call or email any time

you have a question, or will there be a limit on how often you can communicate?

Also make sure you ask at the initial meeting what fees you will pay, and how the pay structure is laid

out. Financial planners get paid in a variety of ways and while we’ll get into those a little further in-

depth later in this report, you need to know this at the first meeting so that you can know what to

expect from the very beginning. On the subject of fees and payments, the initial consultation itself

should never come at a cost. Financial planners should be willing to meet with you for free this time in

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order to “win” you over as a client and give you both a few minutes to decide if you’re a good fit for

each other.

One thing you should never do during this initial consultation is fill out any forms including a personal

information profile, often called an “account opening form.” These forms are usually signed when

someone opens an account with the financial planner and could obligate you to certain things after

you’ve signed it. Don’t ever sign this at the very first meeting as you’ll be meeting with several

planners and you don’t want to miss out on the best one for you simply because you signed too early.

Kindly tell the planner that they’ve given you a lot to think about, thank them sincerely for their time,

and then go home to make your decision.

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How much do Financial Planners Cost?

When it comes to how much a financial planner will cost you, no one can really tell you but the

financial planner you’re considering; and there are many reasons for this. Some of it has to do with

where you live and the costs of living, but most of it is the fact that financial planners get paid in very

different ways. And if you speak to five different planners, you might hear five different ways. It’s

because of this that no one can really tell you how much a financial planner is going to cost. But there

are six main ways that financial planners charge their fees, and using those as a guideline might give

you a better idea of how much a financial planner will cost.

Fee-Only

In this scenario, a financial planner’s fee is a total percentage of your account value. It’s a popular

option and for good reason; the planner has incentive to grow your funds for you and keep your costs

down, while you only pay a percentage of what you grow.

If you speak to a financial planner that uses a fee-only payment structure, make sure to ask them

whether they provide investment management and financial planning, or just investment

management. Many will only provide the latter, although some offer financial planning services along

with investment advice. Beware though that if your planner offers both services, their fee is likely

going to be a little higher for it. The typical amount of this fee is anywhere from 0.5% - 2% of the total

value in your account.

Commissions from Specific Products and Services

At first, you might think that a financial planner that gets paid solely on commissions from the

products and services they sell is what’s best for you. After all, then you’re not the one paying them,

right? Well, yes and no. Some financial planners really know what they’re doing, and really do their

research on the best products and services out there for their customers. They choose to endorse

these products and as such, get paid a commission from this company that they truly believe will do

the best work for their customers.

Other financial planners however, are just interested in selling and the company willing to pay the

most commission wins. You in turn, get that company recommended to you – not because it’s the

company that suits you best, but because it’s the company that pays your planner the most.

If you speak to a financial planner that gets paid through commissions, ask them for a clear

explanation of how they are paid and how much they will receive if you buy those specific products

and services.

Fee-Based

It’s very important not to confuse fee-based with fee-only. Financial planners who get paid on a fee-

based structure will receive both a percentage of the value in your account, probably smaller than if it

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were to be a fee-only structure; and the planner will also receive a commission from the companies’

products and services they endorse.

Hourly Rates

If you want financial planning services that you can easily fit into your budget, and have a concrete

number to put there, than a financial planner that charges an hourly rate might be for you. With this

kind of fee structure, a planner will only give you advice, and won’t do any of the actual organizing or

working with your financial accounts. If you don’t mind doing that kind of legwork yourself, this can be

another great way to pay for a planner. Another great benefit that comes with a planner working at an

hourly rate is that you get completely unbiased advice, and any products or services they recommend

are truly the ones they think are best for you.

Flat Fees

Flat fees are some of the most budget-friendly payment structures that are out there; and again, you’ll

have a concrete figure to work with when you go into it. Financial planners that charge a flat fee

generally do so when they are working on one specific project such as getting your portfolio started,

or helping you outline a financial plan.

Retainer

If you want a financial planner working with you on an ongoing, long-term basis, they’ll most likely ask

you to pay them a retainer fee; these are fees that they will receive either annually or quarterly.

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Questions to Ask Your Financial Planner

Whether it’s during your initial consultation, or later when you’ve narrowed down your choices and are

calling around to narrow your list down even further, here are just a few of the questions that you

must ask before hiring a financial planner.

How much experience do you have, and what kind of experience is it?

Of course it’s important to know how long your financial planner has been working in the industry. But

you also want to know what kind of financial planning they’ve been doing, and whether they’ve been

helping their customers with stocks, securities, bonds, financial plans, or all of the above. This will

help you see whether or not they’re experienced in the kind of financial planning help you need.

What are your qualifications?

Here you’re looking for what their exact designation is, and you need to make absolutely sure that

they have one – it’s the only way to determine that you’re working with a bona fide planner; and not

just someone who’s worked at a bank before and is now between jobs.

What services do you provide?

Of course, you need to know this so that you can know whether or not the planner will be able to help

you. But there’s another reason you need to ask this question as well – and it’s important. Financial

planners can sell things like mutual funds, stocks, securities, bonds, and other investments; but they

must have certain licenses that make them eligible to do so. If you need a financial planner that offers

these kinds of services, you must then ask the following question.

Are you licensed and registered to sell such services?

Here the only acceptable answer of course, is yes. But don’t only ask if they are licensed, ask to see

the license.

What is your financial planning approach?

This doesn’t have anything to do with their credentials or licenses, but it is a very important question

to ask; it’s one that will give you the best insight as to how you’ll get along with the planner in the

long-term. Some planners like to outline a financial plan or overview that covers every single financial

aspect of your life; while others like to take things one by one, project by project, getting one financial

area organized and set up at one time.

Other financial planners will also aggressively push that you invest in the stock market, or mutual

funds. Be wary of this if you’re not comfortable with that, especially if you’ve already told the planner

that.

Will you be the only one handling my account?

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It’s not uncommon that financial planners will work with several others in their office on many cases at

one time; and it’s not something that should alarm you. However, make sure that you ask if this is the

case. If it is, you then need to also make sure that you meet everyone that will be working on your file.

Also ask if the financial planner will need to work with anyone outside of their office such as attorneys,

tax specialists, or insurance agents. If they do, ask for their names so that you can also research their

names and their backgrounds.

What is your payment structure?

Covered earlier, this is something you need to know before you sign anything or commit to anything

with the planner.

How much is your typical charge to clients?

Although every case is different, and you can’t really compare your own situation to anyone else’s, a

financial planner should be able to tell you a rough estimate of what you can expect to pay.

Can I have a written outline of the services you’ll perform for me?

You don’t want a financial planner that promises you the moon, only to find that you end up doing a

lot of their work yourself, and that they don’t have access to the products and services they said they

did. Make sure you get everything in writing and keep it on file for the duration of the time that you

work with the planner.

How many clients have you lost and, why did they leave?

This question is really just to get a sense of the kind of financial planner you’re working with. Are they

honest? No planner is perfect; they’re still human after all. And every one has lost at least one client

along the way. If they get skirmish and seem uncomfortable, or say that they’ve never had a client

walk away from them, they’re lying to you before you’ve handed over your financial documents – and

they’ll lie to you after too.

Also listen to hear the story of why the client left. Be very wary of a planner that blames the customer,

or tries to make it look as though they were just “impossible to work with.” You don’t want to end up

with a planner who’s the same way; and if the planner is going to be that way about it, they probably

are going to be much pushier than you need.

Do I look like your typical client?

If you’re a doctor, a surgeon, a dentist, or a doctor, you might find a ‘niche’ financial planner; a

planner that caters to professionals in that industry. If you’re just starting to build your portfolio or are

just starting out, you might not even meet the planner’s requirements. If that’s the case, they’ll usually

be very upfront about telling you so.

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Conclusion

Finding a financial planner certainly isn’t an easy task. You are after all, about to hand over and

entrust your most personal financial information with someone who is most likely a complete stranger.

And the fact that there are very few regulations and requirements for financial planners in general

doesn’t make it any easier.

The most important thing to understand when looking for a planner is that it’s up to you to do your

research. There’s a lot to be done, and check everything! If a planner says he’s registered with a

Board, check online to make sure they are. If a planner says that they’re registered with a specific

college, call and make sure they are. It may take more time than you were originally looking to invest;

but it’ll be one of your biggest investments that pays off is huge returns, again and again!

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Checklist of Questions to ask a Financial Planner

How much experience do you have, and what kind of experience is it?

What are your qualifications?

What services do you provide?

Are you licensed and registered to sell such services?

What is your financial planning approach?

Will you be the only one handling my account?

What is your payment structure?

How much is your typical charge to clients?

Can I have a written outline of the services you’ll perform for me?

Have many clients have you lost, and why did they leave?

Do I look like your typical client?

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Next Steps

Thank you again for downloading this free report. We hope that you found it useful and it has given

you the information you need to help you better understand the most important things you should

know before hiring any HVAC contractor.

If you would like additional assistance please contact us at:

Your contact information goes here

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Recommended Resources

We know that hiring an HVAC contractor can be a very stressful. While we hope this guide has

provided you with everything you need to give you the confidence in making the right decision we

understand you may need further information and assistance. You can always contact us directly. In

addition, we recommend these helpful resources as well.

This is where you list out any affiliate programs you belong to that are related to financial

planning