What to Look For

Once you've determined your needs, you can better focus your questioning. When you speak with potential planners, briefly explain your particular financial situation and what you expect from them. Then ask the following questions to separate the commission/fee based planners from the clearly fee-only planners:

1. Do you have a sales quota that you have to meet periodically to stay affiliated with your present firm?
   
2. What is the difference between commissions and fees? How do they affect our relationship?
   
3. What is the mix of commissions and fees in your annual revenue?
   
4. Do you pay your own rent and business expenses or does a home office pay them?
   
5. If I buy investment products from you and I decide to move to another advisor, will those products be able to have that new person named as the new rep of record without having to liquidate them?
   
6. What designation or educational credentials do you have?
   
7. What continuing education in financial planning do you pursue? 1-14 hours a year? 15-30 hours? More than 30 hours?
   
8. Do you offer continuous, ongoing advice regarding my financial affairs, including advice on non-investment issues?
   
9. How often will I be meeting with you?
   
10. Do you take possession of or have access to my assets?
    
11. Does any member of your firm act as a general partner, participate in or receive compensation from investments you may recommend to me?
    
12. Do you earn compensation from any of the following sources?
    
• 12(b)1 fees
  
• Trailing commissions of any sort
  
• Surrender charges
  
• Back-end fees
  
• Soft dollar benefits
  
• Contingency fees
  
13. Are you eligible to participate in sales contests with prizes?
    
14. Do you sell insurance?
    
15. Who is your broker-dealer?
    
16. Do you have a network of other professionals when additional expertise is needed?
    
17. If you were managing my portfolio, how would you invest it given current economic conditions?
    
18. Have you every been subject to a disciplinary action by the Federal or State regulatory board?
    
19. Do you work with people with situations similar to mine?*

If you're not comfortable with the answers, never be afraid to say good bye. After all, it's your money.

Financial Planner Choices

To locate planners, look for professional designations Chartered Financial Analyst (CFA) and Certified Financial Planners (CFP)™. These popular professional titles actually mean something.

If Investment Management is an important part of your financial future, look for the Chartered Financial Analyst Designation. The Chartered Financial Analyst® (CFA®) Program is a globally recognized standard for measuring the competence and integrity of financial analysts. It demonstrates a balanced approach to investments, academic discipline, and practical experience that is unique in the investment industry. Investors know that CFA charterholders are uniquely qualified to assist them in making informed investment decisions.

To earn the Chartered Financial Analyst designation, individuals must
(a) pass three levels of exams over a minimum of three years verifying a candidate's ability to apply sound principles across all areas of the investment decision-making process
(b) work in the investment profession analyzing or managing investments for at least three years, and
(c) agree to abide by the CFA Institute Code of Ethics and Standards of Professional Conduct, and reaffirm that commitment each year.

CFA Institute
Tel: 800-247-8132; 434-951-5499
Fax: 434-951-5262
E-mail: info@cfainstitute.org

The Certified Financial Planners (CFP)™ license is the standard for comprehensive financial planning. The qualifications are both academic and experience oriented and requires 30 seminar hours over each two-year period. Keep in mind, though, that CFP certificants encompass planners who are compensated by product commissions in some format as well as those that are compensated solely by the client.

CFP Certification Requirements
Education: Demonstrated academic coverage of more than 100 integrated financial planning topics (that cover the tasks and knowledge necessary to perform financial planning without supervision) through completion of a CFP Board registered program or its equivalent.

Examination: Rigorous case study-based, two day, 10 hour CFP exam. Administered by the CFP Board covering the financial planning process, insurance, risk management, investment management, tax planning, retirement planning, employee benefits and estate planning that tests the ability to apply knowledge to real-life planning situations.

Experience: Proof of three years of supervision, direct support, teaching or delivery of all or part of the personal financial planning process to a client and a bachelor's degree are the basic requirements for certification. Without an undergraduate degree, five years of work experience must be completed.

Ethics: Disclosure of past and pending litigation or agency proceedings and acknowledging the right of the CFP board to enforce its Code of Ethics and Professional Responsibility and Financial Planning Practice Standards through due process is required. The CFP Board reviews all such disclosures and investigates backgrounds of incoming candidates. CFP professionals must also adhere to the CFP Board's Code of Ethics and Practice Standards.

CFP Licensing Body
Certified Financial Planners Board of Standards
1700 Broadway Suite 2100
Denver, CO 80290
1-888-CFP-Mark