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What experience do you have_
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Find out how long the planner has been in practice and the number and types of companies with which she or he has been associated. Choose a financial planner who has a minimum of three years experience counseling individuals on their financial needs.
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What are your qualifications_
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The term "financial planner" is used by many financial professionals. Ask the planner what qualifies him to offer financial planning advice and whether he holds a financial planning designation such as the Certified Financial Planner.
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What services do you offer_
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The services a financial planner offers depends on a number of factors including credentials, licenses and areas of expertise. Financial planners cannot sell insurance or securities products such as mutual funds or stocks without the proper licenses, or give investment advice unless registered with state or federal authorities.
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What is your approach to financial planning_
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Ask the financial planner about the type of clients and financial situations she or he typically works with. Some planners prefer to develop one plan by bringing together all of your financial goals. Others provide advice on specific areas, as needed. Make sure the planner's viewpoint on investing is not too cautious or overly aggressive for you.
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Will you be the only person working with me_
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The financial planner may work with you him or herself or have others in the office assist in your plan. You may want to meet everyone who will be working with you. If the planner works with professionals outside his or her own practice to develop or carry out financial planning recommendations, get a list of their names to check on their background.
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How will I pay for your services_
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As part of your financial planning agreement, the financial planner should clearly tell you in writing how she or he will be paid for services to be provided.
Planners can be paid in several ways:
- a salary paid to the company for which the planner works. The planner's employee receives payment from you or others, either in fees or commissions, in order to pay the planner's salary.
- fees based on an hourly rate, a flat rate, or on a percentage of your assets and/or income.
- commissions paid by a third party from the products sold to you to carry out the financial planning recommendations. Commissions are usually a percentage of the amount you invest in a product.
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How much do you typically charge_
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While the amount you pay the planner will depend on your particular needs, he or she should be able to provide you with an estimate of possible costs based on the work to be performed.
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Could anyone besides me benefit from your recommendations_
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Some business relationships or partnerships that a planner has could affect his or her professional judgement while working with you, inhibiting the planner from acting in your best interest. Ask the planner to provide you with a description of his or her conflicts in writing.
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Have you been publicly disciplined for any unlawful or unethical actions in your career_
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Several government and professional regulatory organizations, such as the National Association of Securities Dealers (NASD), your state insurance and securites department, and the CFP Board of Standards keeps records on the disciplinary history of financial planners and advisers.
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Can I have it in writing_
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Ask the planner to provide you with a written agreement that details the services that will be provided. Keep this document in your files for future reference.
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