Werner Hahn Wealth Management
Interview | Financial Planning
A financial planner can connect all the financial points so that you can provide an overall plan for meeting your financial objectives. Training and experience should be given in all kinds of financial products and financial aspects of your life, such as equities, bonds, insurance, taxes and estate planning, to give you the right recommendations for your own personal situation. You can also save thousands of dollars in tax deductions from financial planners and find more profitable investment products at little or no additional risk.
The fees will vary depending on the education and experience level of the financial planner, and how the fees are assessed. In general, a financial planner will charge based on one of two ways: commission or fee-only. If the planner charges based on commission, the amount will usually be a percentage of each transaction or assets under management. If the compensation structure is fee-only, he or she will typically charge an hourly rate or will quote a specified fee for the services provided.
There are a number of different certifications for financial planning. While a financial planning practitioner may have several appointments or certifications, make sure that he or she is at least licensed and in good standing with the licensing authority. The Certified Financial Planner, Chartered Financial Consultant and Registered Investment Advisor are three of the most frequently used designations. A Certified Financial Planner (CFP) has expertise and experience in all financial planning fields. A CFP has completed study courses on over 100 financial management topics including stocks, taxes and pension plans. The Certified Financial Planner Code of Ethics must also be followed. A CFP is responsible for trust.
A ChFC has extensive experience in helping individuals evaluate their financial goals. A candidate must complete the program and pass the American College tests to obtain the ChFC certification. A Registered Investment Advisor (RIA) doesn't need any special training or certification. However, an RIA must be registered with the security agency of the state in which he or she does business, and must also be registered with the Securities and Exchange Commission if assets under management exceed $25 million.
Select a financial planner with client experience in similar circumstances to yours. You will also want to make sure that the financial planner takes into account your best interests and doesn't sell you products that don't suit your needs. Interview future financial planners and ask about credentials, management strategies and performance history. Call past customers for references.
In similar circumstances select a financial planner with customer experience. You also want to make sure that the financial planner takes your best interests into account and does not sell products that do not meet your needs. Contact future financial planners and ask about credentials, management strategies and the history of performance. Call for references from past customers.
Your plan should be to interview several financial consultants to seek a consultant that meets your investment style, has a good return track, is open about its fee structure, and reveals any conflict of interest. In the course of the interview, ask questions that address these key points. Ask the consultant for information and follow it up to make sure that the consultant is trustworthy.
If the advisor is a Certified Financial Planner, check the Certified Financial Planner Board of Standards. The Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC), and the National Association of Securities Dealers (NASD) are also places to check and make sure the financial advisor has not had disciplinary action taken. Another great source of information is the advisor's past clients. A good advisor won't be afraid to hand out two or three solid references.
A Certified Financial Planner is responsible for putting your needs and interests above its own. Although the CFP may benefit from a product that is recommended to you, recommending a product that is not in your best interests is unethical for a CFP. If you care about the advisor pushing products, hiring a strictly fee-based (as opposed to commission-based) advisor is also a good choice.
Financial planning looks at a person's overall financial picture. A financial planner will often ask a prospective client to fill out an extensive questionnaire in order to understand his or her financial needs and goals. The planner will usually put together a detailed, short-term 5-year plan designed to improve the client's overall financial position. That may be followed by a long-term plan, along with suggestions about how to save and invest for retirement and a child's college education at the same time. The planner will also look at ways to reduce current and future tax liabilities and protect assets by having the proper life, health, disability and long-term care insurance coverage in place. Finally, he or she may offer suggestions for estate planning.
Time horizon refers to the time a person has to save for a specific event. For example, for the parents of an eight-Year old child the time horizon for a college savings account could be 10 years, but for the parents of a three-year-old 15 years. Similarly, the time horizon for a 30-year retirement saving could be 35 years, while a 60-year-old who started to save late in life could be 15.
Financial planning covers all aspects of the financial well - being of an individual. It includes savings, investment, pension and higher education savings plans, insurance cover and estate planning. Pension planning covers only retirement investments.