How do I select a Certified Financial Planner®?

Certified Financial Planner®

How do I select a Certified Financial Planner®?

What to look for before and after choosing one:

Before establishing a relationship with a financial planner you will want to interview several people to make sure they’re the right match for you. Here are 10 important questions to ask before selecting a financial planner, plus some key traits to expect from a good advisor. All CFP® professionals will know the answers to these questions, and exemplify these key traits. Meet with a Vermillion Financial Advisor.

Here are the top 10 key questions to ask:



1. What experience do you have?

What experience do you have? Ask for a brief description of the financial planner’s work experience and how it relates to their current practice. CFP® professionals must have a minimum of three years planning experience. Check and verify their background. This link will take you to the CFP® Board where you can verify if someone who holds themselves out as a CFP®, truly has the CFP® designation. Vermillion financial Advisors currently has five (5) staff members who have acquired the CFP® designation, three of the five have been serving clients for more than 25 years.



2. What are your qualifications?

What are your qualifications? Ask about the credentials your planner holds, and learn how she stays up to date with current changes and developments in the financial planning field. CFP® professionals expand their knowledge and stay up-to-date through mandatory continuing education courses. Credentials, licenses and areas of expertise are all factors that can help determine the services a financial planner can offer. Generally, financial planners cannot sell insurance, or securities products such as mutual funds or stocks, without proper licenses. And they cannot give investment advice unless registered with state or federal authorities.



3. What financial planning services do you offer?

What financial planning services do you offer? Not all financial planning services are created equal. Some firms may focus on estate planning, others on retirement planning and yet others on investments. Making sure your advisor offers the services you desire/need are extremely important to determine upfront. Ask about financial planning processes used, frequency of updates / reviews, and if services are handled in house or outsourced to other firms or professionals. This could make a big difference to your level of satisfaction.



4. What is your approach to financial planning?

What is your approach to financial planning? Make sure the firm’s service philosophy, systems and services meets your expectations. There is nothing worse than expecting one service and getting another. Find out how often you can expect to meet with your advisor? Do you seek someone to meet with “regularly” (say monthly or quarterly) only to end up hiring someone who wants to only provide annual review meeting. The same goes with financial advisors who also provide investment services, ask about investment philosophy. Make sure your advisor isn’t too cautious or overly aggressive for your taste. Are you looking for a buy, hold and rebalance strategy advisor? If so, getting a day trader will lead to nothing other than frustration. Learn how recommendations are carried out and how task are referred out to others on the staff or if they are outsourced outside the firm entirely.



5. What types of clients do you serve?

What types of clients do you serve? Some Certified Financial Planners® prefer to work with young clients starting out. Other work with clients whose assets fall within a particular range, Still other will only work with those clients who are expected to retire in the next 2 years. So it’s important to make sure the Certified Financial Planner® you chose is a good fit for your individual financial situation and has experience service other clients who have similar needs to yours. Keep in mind that some Certified Financial Planners® require you to sign on to all their services in order to welcomed as a new client. Always ask if you can pick and choose to use only the services you seek and upgrade or downgrade the level of services you sign up for originally to add-on or drop-off services as you need more or less in the future.



6. Who will I be working with?

Will you be the only financial planner working with me? Some Certified Financial Planners® work with their clients directly, and others have a team of people that work with them. In some cases the team is located within the firm while other firm outsource functions of their service plan to outside virtual employees or firms. Ask who will meet with you when you have meeting and who will handle servicing you. Meet with them, and ask how easy will it me to reach them and schedule appointments when needed and talk to them over the phone when necessary. In other words how accessible will your Certified Financial Planner® and the other team members be after you sign-up. Find out how well the Certified Financial Planner® works with professionals outside the firm, (such as attorneys, insurance agents or tax specialists). Be aware it is not uncommon to find out that some advisors refused to work with other professionals.



7. How will I pay for your financial planning services?

How will I pay for your financial planning services? Certified Financial Planners® can be paid in many ways: through fees, commissions, mark-ups or a combination of different ways. As part of your written agreement, your Certified Financial Planners® should make it clear how they will be paid and what services are to be provided.



8. How much do you typically charge?

How much do you typically charge? Although what you pay will depend on your particular needs, the planner should be able to provide you with an estimate of possible costs based on the work to be performed. If you are paying a fee make sure you know what your fee covers and the circumstances for additional charges. Costs could vary from hourly rates, flat fees, percentage of net worth, assets under management, commission or even mark-ups received on products you may purchase. Vermillion Financial Advisors works on a fully disclosed fee for service basis. This covers all investment and financial planning services. This means the only income generated for serving you financial needs comes from you and you only. (The only exception to this is on the rare occasion that an relationship does not existing with competent insurance agent and an insurance exposure is discovered through the financial planning process and Vermillion Financial Advisors is thereafter requested to assist in securing an appropriate insurance plan. The insurance industry in most cases requires a professional to be a licensed insurance agent to assist with insurance needs and to be paid on a commission basis. Vermillion Financial Advisors does not require clients to purchase any insurance plan through Vermillion Financial Advisors.)



9. Who benefits from the advice you give me?

Do others stand to gain from the financial advice you give me? Ask the planner to provide you disclose any conflicts of interest (This can be found in writing in form ADV). For example, Certified Financial Planners® who sell securities or mutual funds will have a business relationship with the companies that provide these financial products. Find out if there is any incentive to sell one product over another. Find out if independent are the goodies that they get for offering one custodian over another (a custodian is a firm that holds assets and processes investment trades. CFP® professionals are fiduciaries who have agreed to abide by a strict code of professional conduct and have an ethical obligation to disclose all conflicts of interest and to put your needs above their own.



10. Have you ever been publicly disciplined?

Have you ever been publicly disciplined for any unlawful or unethical actions in your career? The CFP Board, your state insurance and securities departments each keep records on the disciplinary history of financial planners and advisors. Ask which organizations the planner is regulated by and contact these groups to conduct a background check. All Vermillion Financial Advisors CFPs are subject to disciplinary action if they violate CFP Board standards. Vermillion Financial Advisors as a firm is a Registered Investment Advisor (RIA) and licensed insurance agency. We are regulated by the SECURITY AND EXCHANGE COMMISSION, the ILLINOIS DEPARTMENT OF INSURANCE and the CFP Board. Please feel free to click on any of the above links to verify that we are in good standings.