Securities Division - Investor Education
to Choose a Financial Planner
and ask questions to find the right financial planner.
- What is the planner's education and experience? Ask for and check
- Determine if the planner has experience in areas that serve your
interests and needs.
Does the planner offer services that fit your income bracket and investment
- Does the planner offer a wide range of investment choices, or only
those for which the planner will receive a fee or commission?
- Ask how the planner will be paid, and how payment will be made. Payment
methods include flat fees, performance based fees (a fee based on the
increase in the value of your account), hourly rates, commissions, or
a combination of these methods.
- Ask for a copy of the planner's disclosure document, a sample plan,
and a sample contract.
- See the Financial Adviser Interview
Checklist. We developed this checklist to help you choose a financial
planner. It may be used during an interview or sent to a financial planner
as part of a preliminary screening.
- Call The Securities Division to inquire about your planner's status
and to check disciplinary history.
your homework; determine your financial status and objectives. Be prepared
to talk about your specific financial goals.
- Gather your data: income, savings, real estate, taxes, wills, etc.
- Identify your goals and objectives as an individual, a couple, a
- Is the planner interested in clarifying a particular problem you
want to resolve or helping you achieve a particular goal? Some people
may need a plan for only a segment of their finances. Make sure the
planner understands your needs.
- Give this information to your planner in writing, and keep a copy
of this and all other pertinent documents for your records.
3. If you
need on-going planning and advisory services, be certain that the planner
- A clearly-written plan that sets forth goals, alternatives and risks.
- Specific suggestions to improve your cash management.
- Projections of the impact of shifts in interest or inflation, and
a plan to generate cash in case of emergency.
- Monthly or regular written summaries of transactions and the status
of your account or plan, documentation of recommendations, and periodic
review of your plan's status and progress.
- Access to other sources of advice from lawyers, bankers, brokers,
accountants, etc. (Check references here, too.)
4. Make sure
you can understand account and plan statements.
- Understanding your account and plan statements is key to controlling
your investments. Check the statements over carefully as soon as you
receive them. Familiarize yourself with the format, terms and codes
used by your adviser.
- If you ever find information in your account or plan statement that
you do not understand, contact your adviser immediately and get a satisfactory
5. You can
check with industry groups that offer help finding qualified financial planners.
- The Institute of Certified Financial Planners will provide a list
of up to three planners in your area, along with a brochure to help
guide you through the selection process. All suggested planners have
achieved the CFP credential. Call 1-800-282-7526.
- The International Association for Financial Planning (the "IAFP")
will provide a list of five planners in your area, along with two brochures
about how to select a financial planner. To be in this referral program,
planners must affirm that they meet all regulatory requirements applicable
to their practice, and agree to abide by the IAFP's Code of Ethics.
- The National Association of Personal Financial Advisers, whose members
must be fee-only planners ( i.e., planners who are not compensated through
commissions), will provide a list of members from your state along with
a financial planner interview form and a brochure that helps illustrate
how and how much the planner and firm will be compensated. Call 1-888-FEE
- The American Institute of Certified Public Accountants will provide
the names of members in your area who have earned its Personal Financial
Specialist (PFS) designation. The PFS designation is awarded to CPAs
who have several years of financial planning experience, maintain a
continuing education schedule, and pass a qualifying exam. Call 1-800-862-4272.
to do your own homework, and call us to inquire about your planner's status.
we're here to help!