What to Expect When Working With a Financial Planner

Posted by Jill on November 16, 2009

Even the most financially-savvy people sometimes need a little help – and the more money you have, the more you might want to make sure you are handling it as well as possible.

If you find yourself with questions you can’t quite find the answer to online, want to make sure you are handling a special situation as well as possible, or just want reassurance that you are on the right financial track, you may want to consider hiring a financial planner. This article will help you understand what a financial planner can do for you and what to expect when working with one for the first time.

Why Hire a Financial Planner?

These are just some of the things a financial planner can do for you:

  • Determine and prioritize your financial goals.
  • Use your personal goals and risk tolerance to create a sustainable investment strategy that maximizes returns.
  • Create personal financial statements such as a balance sheet and income/expense statement.
  • Use key financial ratios to check you overall financial health, and provide suggestions for improvement.
  • Analyze your insurance portfolio to ensure that you are minimizing personal risk.
  • Develop strategies to minimize income, capital gains, self-employment, gift, and estate taxes.
  • Create and execute a plan for you to retire at the age you want with enough assets to live comfortably.

Meeting with a Financial Planner

A financial planner will want to get a general understanding of where you are in life – how old are you, do you have any children and how old are they, do you (or your spouse) plan to attend any more school, do you own a house, do you plan to support aging parents in any way, etc.

Depending on the planner, you may be asked to fill out a questionnaire in advance of your initial meeting. Others will meet with you first to get the basic information and then have you fill out more details either during the meeting or after the meeting. You should inform your planner of anything unique to you or your family that you think will impact your finances now or in the future.

Your planner will also ask a variety of questions to understand your current financial situation, future income needs, and risk tolerance (for investment purposes). It is important that you are 100% honest with your planner – she will not judge you and is not allowed to disclose any of your personal information to anyone without your consent. In order for your planner to craft a plan that will actually help you, you must admit to all your financial mistakes, be honest about your future aspirations, prepare to hear an honest assessment of your situation, and be willing to work with your planner to improve your finances. If you have certain things you aren’t willing to give up or certain savings goals that are non-negotiable, speak up – your planner is only as good as the information she has to work with.

What to Bring to the Meeting

When you meet with a financial planner, you should bring the following documentation:

  • Bank/credit card statements showing expenditures for at least one year and current balances.
  • W-2s/1099s showing income for at least one year.
  • Tax returns for at least two years (up to five can be helpful if they are available).
  • Mortgage and other debt information.
  • Life, health, home, auto, long term care, and liability insurance policies and information on current premiums.
  • Retirement account balances and asset allocation.
  • Investment account balances and asset allocation.

If you have a small business you should also bring the above information for your business.

Choosing a Financial Planner

If you think that you could benefit from hiring a financial planner, ask family members, friends, or colleagues for a referral. I may be biased since I am studying to become one, but you should consider looking specifically for a Certified Financial Planner (CFP) professional. CFP practitioners are required to take an ethics pledge, have an annual continuing education requirement, and are governed by the CFP board.

It’s ok to meet with a few planners before deciding on one – a good planner will give you a free initial consultation. If you hope to build a long-term relationship it is important that you choose a planner you are comfortable with from the start. You can also get estimates from multiple planners to get an idea of the going rates in your area.

Once you have chosen a planner and worked with him to create your initial financial plan, you should plan to check in and revise your plan at least annually or whenever a life event changes your financial situation. Some planners may want to work with you as often as every three months, especially if you have large investments, or short time horizons for some of your savings goals.

Fee Based Financial Planners

You should also look for a planner that is fee-based, meaning they charge you by the hour rather than charging a percentage of your assets or charging commissions on products they sell you. You can search for fee-based planners by location through the Garret Planning Network.

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Comments to What to Expect When Working With a Financial Planner

  1. What a timely article. My wife and I are in the early stages of looking for a fee-based financial planner. Thanks for the info!


  2. strangely enough, i am currently reading a finance book and i just finished the part about how to deal with all the types of financial planners from how to measure their competence and who to pick their brains on their strategies and so many other things. The book is benjamin graham’s the intelligent investor. It really helped me and i think that it would help any person seriously looking for advice in this touchy area (since everybody fancies themselves a finance guru at a certain point in their lives)


  3. My wife and I were just talking about financial planners recently—at what threshold do you think you need someone to manage your investments?

    Andrew @ Earn Give Save

  4. @ Andrew @ Earn Give Save i am no expert here but i think that you should get a manager when you feel that you dont have enough time and the necessary skills required to manage the portfolio on your own. But you must be weary of managers or advisers because most look out for number one and not to get you the highest returns fro your investments


  5. Great post until the end. What I think you meant to say was to hire a Fee-Only financial planner. Coincidently my current post is about Fee-Only vs. Fee-Based. Your post is just another example about how knowledgeable people are often confused by these terms. Fee-Based generally means a plan for a fee with implementation via the sale of commissioned financial products or the use of an expensive investment wrap program.

    In addition to your link to the Garret network which I agree is a great organization, you might also suggest that your readers check out http://www.napfa.org the website of NAPFA the largest Fee-Only professional organization in the country.

    One other comment, there is nothing wrong with advice based on a percentage of assets if that is in the client’s best interest, consumers do need to understand exactly what they are paying for and the basis for that fee.

    Good luck with your studying for the CFP® exam. It was the toughest exam that I have ever taken, I strongly suggest a good review class for the final exam.

    Roger Wohlner

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