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What to Consider When Choosing a Financial Planner

Outline:

What is a CFP®
- Financial Advisor versus a Certified Financial Planner
  - CFP® professionals have met rigorous qualifications for financial planning. Only those who have fulfilled CFP Board’s rigorous requirements can call themselves a CFP® professionals.
CFP® designation
- As part of their certification, CFP® professionals commit to high ethical standards. What’s more, a CFP® professional must acquire several years of experience related to delivering financial planning services to clients and pass the comprehensive CFP® Certification Exam before they can call themselves a CFP® professional.
How to choose a Financial Advisor or CFP
- Consider what your financial needs are
  - Do you need an estate plan? Business exit strategy? Tax planning? Investment advisor? If you’re looking for someone to provide holistic financial advice, then a CFP is going to be the best fit for you.
- There are a few helpful questions you should ask when interviewing potential Financial Advisors or CFP.
  - Do you ask to see my tax returns?
    - Only 3% of financial planners ask for a tax return-need to understand how the individual is reporting to the government to create a Bonafide financial plan
  - How do you get paid?
    - Assets under management
    - Hourly fee
    - Flat annual fee
    - Per-plan fee
    - commissions
  - Are you a fiduciary?
    - A fiduciary is an individual who acts in the best interest of a particular person or beneficiary. … Working with a fiduciary financial advisor means that they have your best financial interests at heart. Please note that not all advisors are fiduciaries
    - Blue Rock is! A CFP® professional is committed to the CFP Board to act as a fiduciary at all times when providing financial advice to clients.
  - What is your approach to financial planning?
    - Do they create a comprehensive financial plan? Do they prefer to implement all recommendations on your behalf or are they not as hands-on?
  - What type of clients do they typically work with?
    - Some CFP prefers to work with clients whose assets are within a specified range.
  - How many advisors will be involved?
    - This will help you not only put a face to the name(s) working on your financial plan but understand who will be directly involved.

Key Concepts

1	Key Concept Key Concept Text <span data-contrast="auto">The first step in searching for a financial planner is understanding a few key differences between a CFP® professional and a financial advisor.</span> <span data-contrast="auto">According to the Bureau of Labor Statistics, there are 218,000 personal financial advisors in the U.S. From tax professionals to insurance, these professions can all fall under the title of a financial advisor or planner, making it a bit of an umbrella term. There is no common standard or regulations a financial advisor or planner can be held to. </span> <span data-contrast="auto">A Certified Financial Planner professional or CFP® are certified by the CFP Board. This certification is the standard of excellence in financial planning. CFP® professionals have met strict requirements including rigorous education, training, and adhere to the highest ethical standards. In addition, they are held to a fiduciary standard and must always act in their client's best financial interest. </span> <span data-contrast="auto">This means that if you're wanting a financial planner that can create and maintain a financial plan with your best interests in mind, a CFP® may be the best option. </span> Key Points to Cover
2	Key Concept Key Concept Text <span class="TextRun SCXO1497457 BCX0" lang="EN-US" xml:lang="EN-US" data-contrast="auto"><span class="NormalTextRun SCXO1497457 BCX0">The second consideration you should make is having a clear definition of what your financial needs are. Do you need a comprehensive plan that accounts for multiple aspects of your financing? Or are you just looking for someone to do your taxes? If you're wanting holistic financial advice for areas such as retirement planning, tax planning, estate planning, business planning, and more, a certified financial planner is the best choice. </span></span><span class="EOP SCXO1497457 BCX0"> </span> Key Points to Cover
3	Key Concept Key Concept Text <span data-contrast="auto">When it comes time to choose, here are a few questions you should ask before making a decision:</span> <ol> <li><span data-contrast="auto"> Do you ask to see a client's tax returns? This is an important question to ask because it helps a financial planner get a better understanding of your financial situation. A tax return can provide critical information when creating a long-term financial plan. It lets them get an overview of what you're reporting to the government to create a bonafide financial plan for you.</span></li> <li><span data-contrast="auto"> How do you get paid? It's important to consider how your advisor is getting paid. </span></li> </ol> <ul> <li data-aria-posinset="1" data-aria-level="3"><span data-contrast="auto">Assets under management</span></li> <li data-aria-posinset="2" data-aria-level="3"><span data-contrast="auto">Hourly fee</span></li> <li data-aria-posinset="3" data-aria-level="3"><span data-contrast="auto">Flat annual fee</span></li> <li data-aria-posinset="4" data-aria-level="3"><span data-contrast="auto">Per-plan fee</span></li> <li data-aria-posinset="5" data-aria-level="3"><span data-contrast="auto">Commissions</span></li> </ul> <ol start="3"> <li><span data-contrast="auto"> Are you a fiduciary?</span></li> </ol> <span data-contrast="auto">Unlike a Certified Financial Planner, not all advisors have a fiduciary obligation. A fiduciary must disclose any conflicts of interests and continue to put your best financial interests ahead of their own. Request your financial planner to provide you with this commitment in writing. </span> <ol start="4"> <li><span data-contrast="auto"> What is your approach to financial planning?</span></li> </ol> <span data-contrast="auto">This question will help you understand their policies and procedures. Will they create a comprehensive financial plan for you? Do they implement recommendations on your behalf or are you expected to implement them yourself?</span> <ol start="5"> <li><span data-contrast="auto"> What types of clients do you work with?</span></li> </ol> <span data-contrast="auto">As mentioned earlier, many CFP</span><span data-contrast="auto">® professionals and advisors prefer to work with clients whose assets are within a specified range as their specialty. </span> <ol start="6"> <li><span data-contrast="auto"> How many advisors will I be working with?</span></li> </ol> <span data-contrast="auto">It's not uncommon for there to be a team of advisors working to serve a client. Taking the time to learn who they are and their qualifications can not only put a face to the name but help establish who will be playing a direct part in your financial plan. </span> Key Points to Cover
1	Key Concept Key Concept Text Key Points to Cover

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