Financial Planners

Financial Planners

A financial planner typically prepares financial plans for his or her clients. The kinds of services financial planners offer can vary widely. Some financial planners assess every aspect of your financial life—including saving, investments, insurance, taxes, retirement, and estate planning—and help you develop a detailed strategy or financial plan for meeting all your financial goals. Other professionals call themselves financial planners, but they may only be able to recommend that you invest in a narrow range of products and sometimes products that aren't securities.

When hiring a financial planner, you should know exactly what services you need, what services the planner can deliver, and any limitations on what he or she can recommend. In addition, you should understand what services you're paying for, how much those services cost, and how the planner gets paid. Financial planners charge for their services in different ways: some charge either a fixed fee or an hourly fee for the time it takes to develop a financial plan, but don’t sell investment products; some are paid by commissions on the products they sell; and others use a combination of fees and commissions.

Financial planners may come from many different educational and professional backgrounds. If you’re considering using a financial planner, be sure to ask about their background. If they have a credential, ask them what it means and what they had to do to earn it.

Some financial planners have credentials like CFP® certification or CFA (Chartered Financial Analyst). Find out what organization issued the credential, and then contact the organization to verify whether the professional you're considering did, in fact, earn the credential and whether the professional remains in good standing with the organization. For a helpful list of various financial industry credentials (including the name of the issuing organization and any education or experience required to attain the credential), please read FINRA's Understanding Investment Professional Designations.

If the professional you're considering claims to be a CFP® certificant, visit the website of the Certified Financial Planner Board of Standards. The Board is an independent regulatory organization that licenses financial planners as CFP® professionals. Check to see if the professional is certified as a CFP® professional and whether his or her certification has been suspended or revoked by the Board. You can also call the Board at (800) 487-1497 to obtain additional disciplinary information about the professional.

The Certified Financial Planner Board of Standards also has brochures – What You Should Know About Financial Planning and Questions to Ask When Choosing a Financial Planner – that will help you identify a financial planner who’s right for you.

Financial planners who give investment advise to their clients must register with the SEC or the appropriate state securities regulator. For more information about investment advisers, read our publication entitled Investment Advisers: What You Need to Know Before Choosing One.

We have provided this information as a service to investors.  It is neither a legal interpretation nor a statement of SEC policy.  If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.