Jun 19, 2020 by Alexandra Armstrong

One of the most important things to do when creating the financial plan for Your Next Chapter is to select the financial planner who will be helping you to prepare and implement your long-term financial  plan(s). The financial plan is the starting point — a road map, if you will. Financial planning is a lifelong process and your financial planner is your navigator. It’s important you choose the right person to be your financial planner, as this should be a long-term relationship.

You should look at the same factors you would when you select other advisors.  Your financial planner should be experienced, educated and empathetic. After working with your planner for a while, she’ll know more about you than most people do — even other family members — so trust is an integral part of your selection process.

How do you find a financial planner?

The best way is to ask family, friends and other professional advisers you trust for referrals. There is no better resource than the first-hand experience of those closest to you. Ask whether they’ve worked with or know of a financial planner who’s helped people successfully achieve their financial goals, solve a thorny problem, or plan for retirement. 

Another valuable resource is to the Financial Planning Association, which maintains a database of financial planners searchable by ZIP code, at plannersearch.org.  In addition, the CFP board, who administers the CERTIFIED FINANCIAL PLANNER^TMcertification maintains a searchable database at letsmakeaplan.org.

Once you have the names of two or three planners, call their offices and ask them to send you some material about themselves and their firm. Most firms have websites that will provide you with basic information about the firm, but a phone call is helpful to get a first impression.  Take note of the little things – how they answer the phone, how quickly they send you their information, and your rapport with person who handles your call.

Once you’ve reviewed the material, make an appointment for an introductory meeting. This interview should be free of charge and is a “get to know you” interview. The purpose of the meeting is to determine whether you think the planner is the right one for you, and vice versa.  A successful planner will be interviewing you just as much as you are them, to ensure that you have a successful relationship.

At our firm, we ask you to complete and return to us a financial questionnaire before the meeting. This way we have a chance to look at your situation before you arrive and thus the meeting can be more productive. Some people are reluctant to provide all that personal information before the initial meeting, and that’s fine, but a basic overview will ensure the meeting is productive.

After you review the preliminary material, you should look for answers to the following questions. Some of this information will be available in the material; others will be answered in the initial meeting.

1. What financial planning credentials do you have?

A CERTIFIED FINANCIAL PLANNER^TM practitioner is the best-known educational credential in the financial planning profession. To qualify as a CFP® practitioner, the planner must successfully complete a course of study in all aspects of financial planning and pass a comprehensive written exam. In addition, the practitioner must have at least three years of experience counseling clients on financial planning matters. To retain certification, the planner must complete a minimum of 30 hours of continuing-education credits every two years and agree to abide by a professional code of ethics.

There are other financial planning designations, but with over 83,000 credential holders nationwide, and over 180,000 across the globe, the CFP® certification is the premier certification among planners. 

2. How long have you been providing financial planning advice to clients?

We recommend that the planner has had at least three years’ experience working with clients or under the supervision of a more experienced planner. It’s our opinion that the longer a planner has been practicing, the more valuable they can be to the client, as they will have greater experience with different planning issues that may arise. 

3. Do you specialize in working with a certain kind of client?

Some planners require new clients to have a minimum level of income or assets, or both. In today’s era of specialization, many planners specialize in working with a certain type of client (doctor, corporate executive, business owner, widow, retiree) and may not want or have the expertise to work with other types of clients.

In addition, there are many planners now that work with clients virtually, using video calls and interactive client portals, and this may be of value to you in today’s health climate. 

4. How do you gather data?

In the old days, a planner would typically provide you with a detailed questionnaire, which you filled out by hand, along with supporting hard copies of statements, insurance policies, estate planning documents, etc. 

Thankfully, much of this data collection can be done electronically now, and many planners will provide a client portal where you can link accounts, upload documents, and provide notes and comments. 

This saves you time and energy, and provides the planner with a more complete picture of your financial life. Similar to the way you work with your accountant, the more you’ve organized your financial information, the quicker they can complete your tax return.  The same is true of a financial plan – the more organized your information is, the less time it’ll take the planner to prepare your plan.

5. Do you provide other services besides financial planning such as tax preparation, investment management and estate planning?

Some planners offer only financial planning advice and work with other advisers to provide other services. Other planners provide some or all of the related services. Depending on your preference, you should find out whether the planner has the capacity accommodate all of your needs in one place, or if you will have the ability to keep some of your existing advisers if you so choose. 

6. How do you charge for your services?

Ask for an estimate of what your plan will cost. The financial planner should make it clear to you what and how they’ll charge for financial planning advice, as well as for investment advice or other services outside the scope of the planning engagement. 

Most financial planners charge an hourly fee for their financial planning advice and typically have a minimum fee. Some planners charge a flat fee, while others will waive their financial planning fee if you decide to let them manage your money.  Recently, there is a new group of planners who charge monthly, subscription-style fees, which gives you access to planning advice throughout the year.

No matter how they’re compensated, preparing a personalized, effective financial plan requires time and experience.  Just as you pay doctors, lawyers and accountants for their professional advice, so should you pay your financial planner for preparing a financial plan and providing you with financial planning advice.

If they provide investment management services, most financial planners will charge a separate investment advisory fee based on the assets managed. 

7. When will I pay for your services?

Some planners require an initial deposit while others wait until the initial plan is completed to charge the fee. At my experience, I found that my client’s would provide me with the information in a timelier fashion if they’ve made an initial deposit. If you know that you work better with this type of “personal incentive” you may want to form a relationship with a planner who uses this structure. 

8. Will you be handling me personally or will I be working with others in your firm?

Just as in a law firm, it wouldn’t be unusual for a senior adviser to delegate part of the work to others in the firm, which often means that some of the work will be charged at lower rates. What’s important is that your adviser takes primary responsibility for supervising and implementing your financial plan. If more than one person will be involved in the financial planning process, ask to meet the other people involved. 

After you meet with the planners, you’ll decide whom you want to work with on an ongoing basis. Once you’ve made your selection, typically the planner will provide you with a written contract that will outline what she’ll do for you and what she needs you to provide to her. She’ll tell you how she’ll charge for her services and how you’ll be billed.

The first year together in the financial planning process is the most labor-intensive because it’s the organizational phase of the relationship. After this initial year, you should feel in better control of your financial future since you know that you have a plan to follow.

Over the ensuing years, economic conditions, markets, tax laws, investment opportunities and your situation will change, and your planner will adjust the plan accordingly to reflect these changes. Selecting the right financial planner to guide you down the road to Your Next Chapter will help you in the achievement of your goals.  

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