Preparing for your first financial planner - East Valley Tribune: Business

Preparing for your first financial planner

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Posted: Saturday, April 11, 2009 5:06 pm | Updated: 1:33 am, Sat Oct 8, 2011.

Rebecca Warren: If you’ve never met with a financial planner before, or if it’s been years since you’ve visited one, you need to find a planner and then prepare for your visit.

If you’ve never met with a financial planner before, or if it’s been years since you’ve visited one, you need to find a planner and then prepare for your visit.

Generally, you should research individual financial advisers or firms, and you should look to trusted friends and family for advice.

The following are some questions you should ask a prospective financial planner.

What training do you have? Find out how long the planner has been in practice and what kind of certifications they hold. A Certified Financial Planner professional is someone with a minimum experience of three years who has completed a comprehensive course of study through a degree or certificate program offering a financial planning curriculum approved by the CFP Board of Standards, Inc.

CFP practitioners must pass a comprehensive two-day, 10-hour certification examination that tests their ability to apply financial planning knowledge in an integrated format. Based on regular research of what planners do, the exam covers the financial planning process, tax planning, employee benefits, retirement planning, estate planning, investment management and insurance.

What services do you offer? What a financial planner offers is based on credentials, licenses and areas of expertise.

Generally, financial planners cannot sell insurance or securities products such as mutual funds or stocks without the proper licenses, or give investment advice unless they are registered with state or federal authorities. Some planners offer financial planning advice on a range of topics but do not sell financial products. Others may provide advice only in specific areas such as estate planning or taxes.

How do you charge for your services? Professional planners will provide you with a financial planning agreement that spells out the services they provide and how they’ll be compensated. Payment can happen in one of several ways:

• Salaried planners are actually employees of a firm, and you help pay their salaries through fees or commissions you agree to pay.

• Direct fees to the planner through 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 based on the planner’s recommendations. Commissions are typically a percentage of the amount you invest based on those recommendations.

• A hybrid of fees and commissions based on services. A planner may charge a fee for designing a comprehensive financial plan and occasional visits and calls to review it, while commissions might come from products they sell that you invest in. (Planners may offset some fees in exchange for commissions.)

When you select a planner, they’ll give you a list of documents and information to bring in for your first meeting, and generally, it will include summaries concerning:

• Current and projected income. This would include statements or detail such as a current pay slip, business profit and loss statements, pension income statements, statements of non-investment income, tax returns and annuity statements.

• Current and projected expenses. This would include information on expenses concerning your home, transportation, food (grocery and restaurants), medical, education, child care, personal grooming, pet care and insurance (health, life, auto, disability).

• What you own. You’ll need to bring information on your assets such as principal residence, vacation home, investment property, bank accounts, investments, collectibles and personal property, automobiles and other vehicles.

• What you owe. You’ll need to bring information on your liabilities such as mortgage, auto, college and business loans and credit card debt.

Rebecca Warren is a certified financial planner professional and certified senior adviser in Mesa. She can be reached at (480) 357-8380 or by e-mail at

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