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Financial Planning Newsroom |
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Does Your Financial Planner Have the Right Experience?
Under Connecticut law, applicants for investment adviser registration must have at least three years of securities related experience as a broker-dealer, agent, investment adviser or investment adviser agent or be otherwise qualified by knowledge and experience as determined by the Commissioner. If the planner is registered in any of these capacities, information concerning his or her past work experience will be available from the Division. Be very cautious when a planner suggests that he or she does not have to be registered with either the Division or the SEC in any capacity, especially if the planner is promoting comprehensive financial planning services. After all, how comprehensive can a plan be if it does not include advice on securities investments?
Note that to qualify for the CFP designation, planners would also have to meet an experience requirement.
In addition, ask the planner these questions:
How did you get my name, telephone number and/or address? (Ask this question if the planner solicits your business through a telephone call or by mail. Never do business with a planner strictly over the phone or in response to a piece of mail, including E-mail, unless you've first investigated the planner's past track record or otherwise know something about the planner's credentials. The same holds true for planners advertising on the Internet.)
How long have you been doing financial planning and working directly with clients?
Do you have experience in my areas of interest? (Examples include retirement planning, business planning, etc.)
What did you do before you got into financial planning?
What is your typical client profile? (Examples include retirees, middle-income clients and business clients.)
May I see a few sample plans? (Watch out if the planner refuses to provide samples or if all of the plans provided have nearly identical recommendations.)
May I have the names of other clients with whom I can check? (Be careful if the planner only gives you one or two names since these people may be selected by the planner to give you rave reviews on his or her performance.)
Can I have a list of references? Some planners circulate promotional materials containing a reference list of professionals such as attorneys or accountants. Do not be shy about calling these references to ask about their affiliation with the planner and whether they can vouch for the planner's business repute. For example, it is not unheard of for an unscrupulous planner to list as a reference an attorney who did nothing more than file the planner's incorporation papers years before and who is now unaware that the planner is using the attorney's name as a reference.
Will I be working directly with you or with your associate? (If you will be working with the planner's associate, ask the planner about, or otherwise investigate, the associate's experience and training. In addition, meet with the associate.)
Will other people such as accountants and attorneys be helping you to prepare my plan? Who are they? (Once you have found out the names of these people, ask questions concerning their background, training and experience as these relate to the services the planner will be providing to you.)
Are you new in town? (Be wary of planners with no established roots in the community, especially if you can't find out anything about their prior background, training and experience.)
In addition, if the planner will give securities advice, the Division and the SEC require the delivery of a "brochure" or disclosure document to clients. The brochure contains information on the adviser's background and experience. Ask for it.
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Contact a financial professional in your area now for a free case review.
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