How do you charge? This is an obvious one. What you are looking for is to fully understand the answer provided. This is harder than it sounds. If you don’t come away from that question knowing exactly what you might be paying up front and over time, something isn’t right. Either the answer was not clear, you need clarification, or there isn’t enough information for the planner to answer the question. But at some point early on you should have a clear understanding.
Are you a CFP®, if not why? In the world of financial planners there is a designation called the CFP®. It stands for Certified Financial Planner. More and more planners are getting this designation and it is getting harder and harder to get, both of which are a good thing. If the planner is not a CFP® it is not necessarily a deal breaker, possibly they are established in their career and just haven’t gone back to obtain it, or maybe they focus on a specific area of planning as opposed to comprehensive planning so it isn’t as necessary. Other than that it is good if you can find one to work with.
Do I look like your ideal client? Established planners have an ideal client. It is not just anyone who fogs a mirror, it is a specific type of household. Often it has to do with net worth, which is unfortunate. It could be a particular occupation like doctors or salespeople or business owners of certain industries. If you are outside of that profile it doesn’t mean the planner won’t work with you, but it should be addressed.
What will dictate when and how often we get together? Clients and planners often have a misunderstanding of this part of the relationship. Once the accounts are funded, the recommendations are given, the insurance is finished and so on, what happens next? Perhaps one option is to try and meet on the anniversary of when the account was established. Then at least a conversation per year occurs and there is some meaning to the timing.
Where do you see yourself in 10 years? This is my favorite one. Not you the client in 10 years, but the planner. There are statistics in the industry that state the majority of planners are over age 50. They are retiring much faster than they are being replaced. Actually about 12,000 to 16,000 planners are going to retire annually in the coming years, according to a recent Forbes article (1). This is, presumably, a long term relationship you are entering with this person. Having someone that is scheduled to retire before you, or that is setting you up to be sold as a client to another party, or plans to pass you off to a junior planner is certainly a topic that should be discussed ahead of time. If the planner will be retiring before you that doesn’t always mean there cannot or should not be a relationship, you should just know up front.
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Brian Kuhn is the manager of PSG Clarity with Planning Solutions Group, which focuses on affordable and efficient financial planning. He is a CERTIFIED FINANCIAL PLANNER™ (CFP®), Chartered Life Underwriter (CLU®), and Certified in Long Term Care (CLTC). He focuses on retirement planning, investments and insurance protection, with a special interest in assisting public sector employees. He is the author of two books; Total Compensation: A Practical Guide to Federal Employee Benefits, and The Personal Finance Handbook, both available through Amazon. He has contributed articles to or been quoted on personal finance by the WSJ, USNews.com, Yahoo Finance, HuffingtonPost and Fedsmith.com among others. PSG Clarity is a division of Planning Solutions Group. To email Brian: firstname.lastname@example.org