5 steps to ensure you are getting real financial planning


The spectrum of professionals who claim to offer financial advice is a broad one — so broad, in fact, that it can be difficult to define exactly what “financial planners” are and the kinds of skills they should bring to the table in their work with clients.

Amid the alphabet soup of acronyms that may appear on a financial professional’s business card or résumé — which represent the professional licenses, designations and certifications that person has earned — it’s critical not to lose sight of the fundamental skills and attributes that set true financial planners apart from professionals who claim the title but lack the training, competence and expertise to substantiate it.

The benefits of working with a financial planner are well documented. But to realize those benefits, you had better be sure the professional in whom you are entrusting your financial well-being — and, likely, your assets — has the right combination of core competencies and expertise.

Let’s be clear: Financial planning is not purely about investments or insurance. The problem is that the title “financial planner” and term “financial planning” have been used for marketing purposes by many in the financial services industry to sell their investment or insurance services, when what they are actually providing clients in not really financial planning.

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To call him- or herself a financial planner, a financial professional should be trained and have demonstrated competency in multiple areas of finance, including cash flow, investments, retirement, tax, estate planning, risk management and insurance, and education funding. Professionals must also be able to demonstrate their ability to integrate the applicable areas into a cohesive plan that helps individuals determine if they are on track to achieving their stated goals.

It’s a case of “buyer beware.” So how can you know for sure what you will receive from someone professing to be a “financial planner” or offering “financial planning” is really delivering on what they are promising? Here are five initial questions you can ask of your prospective financial planner to know for sure.

1. What is your information-gathering process, and what does it include? The entire financial planning process is predicated on the financial professional having a thorough picture and understanding of an individual’s, a couple’s or a family’s financial life and their goals, both short- and long-term. Financial planners, especially those who are certified financial planner (CFP) professionals, are trained to perform a complete data-gathering process with all their clients, allowing them to see the big picture before making any recommendations to the client.

If the professional you are working with is only focused on gathering information about investments or insurance, they likely are not going to develop a complete financial plan.

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