Partnering with a financial planning professional or advisor, is one of the most important financial decisions you will make. It will take some work but finding the right fit will help reduce your financial stress and increase your confidence. Consider the following when choosing who to partner with.

Qualifications and credentials?

According to the CFP Board (Certified Financial Planner Board of Standards, Inc), 90% of consumers feel that an advisor’s certifications are important [1]. Ask about the credentials your advisor holds, and how he or she stays up to date with current changes and developments in the financial planning field.

Most people think all financial planners are “certified,” but this isn’t true. Just about anyone can use the title “financial planner.” Only those who have fulfilled CFP Board’s rigorous requirements can call themselves a CERTIFIED FINANCIAL PLANNER™ professional. CFP® professionals are rigorously trained in 72 areas of financial expertise, must accrue thousands of hours of experience prior to earning their certification and have at least two years of personal financial planning experience.

As part of their certification, CFP® professionals commit to acting as a fiduciary when providing financial advice to a client, and they expand their knowledge and stay informed through mandatory continuing education. A fiduciary financial advisor is an advisor that has a duty of good faith and is ethically bound to act in their client’s best interest. 

How will I pay for financial advice?

You can pay for financial advice in several ways: flat financial planning fees, Assets Under Management fees, or a combination of both. Flat financial planning fees can be billed hourly, monthly or annually depending on the scope of the engagement. Assets Under Management (AUM) fees are based on a percentage of the investable assets the financial advisor manages for you. Your advisor should clarify how he or she expects to be paid for services rendered.  How much you pay will depend on the level of complexity in your planning needs.

 Conflicts of interests?

As part of their certification, CFP® professionals make a commitment to CFP Board to abide by their Code of Ethics and Standards of Conduct and place your interest first when providing financial advice.

Conflicts of Interest exist when an advisor’s interests (including the interests of their firm) are opposite the advisor’s duty to the client. For example, if the advisor works for a specific insurance company or investment product provider, he or she may be obligated or incentivized to recommend a certain product.  Independent Advisors are not bound to one specific insurance or investment company and can focus on products solutions that are best for you, not just the ones they are supposed to sell.

 Final thoughts

Winston Churchill one said, “Plans are of little importance, but planning is essential.”  I have met many over the years who view of planning as a one-time event, a physical document containing projections on investment returns, wealth accumulation totals and a summary of their Net Worth.   And while, a Financial Plan does include those pieces, a lot can change from one year to the next.  Some of it we can control; spending habits, income, and investment risk.  Some of it we cannot control; changes to our health and longevity, the tax code, policy changes (i.e. Social Security), and market volatility. Since these, and other factors are constantly changing, I believe that the most successful financial planning relationships focus on an ongoing collaborative process between clients, and their team of advisors (CFP® professional, Certified Public Accountant, Attorney, etc). 

Helpful links:  
CFP Board’s Verify your Advisors Status:  www.letsmakeaplan.org
SEC’s Investment Adviser Public Disclosure databases: www.adviserinfo.sec.gov
FINRA’s BrokerCheck: www.brokercheck.finra.org

Michael P Green is a Certified Financial Planning Professional™ and Wealth Management Advisor with Apollon Wealth Management, an Independent Registered Investment Advisory Firm with offices in Charleston and Mt. Pleasant. He earned his B.A. from the University at Albany and M.B.A. from the Sage Graduate School, in Albany, NY. In addition to being a Certified Financial Planning Professional™ (CFP®); Michael also holds the Chartered Life Underwriter (CLU®), Chartered Financial Consultant (ChFC®), and Retirement Income Certified Professional (RICP®) designations.

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