When information overwhelm hits and you don’t know what to do with your money, one option is to work with a CERTIFIED FINANCIAL PLANNER®. One or two hours with a knowledgeable financial planner, can get you back on track.
Most CERTIFIED FINANCIAL PLANNERs® offer a free initial consultation. This session, usually around 30 minutes, is designed for consumers to get to know the planner. As a client, your goal is to walk out, knowing with 100% certainty, that the planner will put your interests above their own.
In order to walk away with that confidence, there are 2 very important steps to take before the meeting.
# 1 – Research Financial Planer’s Form ADV
Form ADV is a document that the planners firm is required to file with either the state they’re registered to do business in or to the SEC. If they’re registered with the SEC, they’re allowed to do business in all states.
Form ADV has two parts. You want to look closely at both.
In Form ADV Part I, you’ll find:
- Basic information about firm such as ownership, employees, affiliations, and any past disciplinary events of employees or advisers.
In Form ADV Part II, you’ll find:
- Types of advisory services offered
- Fee schedule
- Any conflicts of interest
- Educational background
- Business background
Read each of document carefully. If there’s anything you don’t understand, ask the planner to clarify at your first meeting.
Look for your financial planners Form ADV Parts I and II online through the SEC’s website.
If you can’t find any information about your financial adviser, they’re not registered to sell advice for a fee. In that case, they likely only offer a limited line of products such as insurance and annuities. In other words, run don’t walk if you can’t find the adviser’s or their firms Form ADV online because you’re not getting financial planning.
# 2 – Know the 10 MUST ASK Questions
The free initial consultation is your chance to do the talking.
Forbes has prepared a list of questions which I recommend you take into your first meeting. The article, titled “10 Questions to Ask When Choosing a Financial Advisor” contains the following ten questions, along with tips on what’s a good answer.
- What experience do you have?
- What are your qualifications?
- What services do you offer?
- What is your approach to financial planning?
- Will you be the only person working with me?
- How will I pay for your services?
- How much do you typically charge?
- Could anyone besides me benefit from your recommendations?
- Have you ever been publicly disciplined for any unlawful or unethical actions in your professional career?
- Can I have it in writing?
Last, the brochure contains a checklist for your interview. By bringing the checklist to your meeting you can leave with a nice clean outline of exactly what you can expect from working with this particular CERTIFIED FINANCIAL PLANNER®.
As much as I would like it to be, the CFP® designation isn’t the end all be all of financial designations. While working with a CFP® guarantees you’re working with someone with experience, the services you receive differ from CFP® to CFP®.
If you don’t like what you hear during your free initial consultation, walk away. It’s your money and your future, if you think the planner is putting their goals in front of yours, you owe it to yourself to find a financial planner who will.