Current Issues With Financial Planners

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What is a Financial Planner?

A Financial Planner is one who helps manage money and is involved with the overall success in achieving financial needs, goals, and will guide one to a better and more secure retirement. The process of Financial Planning is:

1. Determine financial situation

2. Develop financial goals

3. Identify alternative courses of action

4. Evaluate your alternatives

5. Create and implement your financial plan

6. Review and revise your plan. (1)

Financial Planning Careers

There are a number of financial service careers and two that are growing and critical in the field of finance are becoming a Financial Adviser (FA) and Certified Financial Planner (CFP®). An FA may have some of the same licenses as a CFP®; however, the CFP® will have further knowledge and skills to set the two apart, and the people who want a financial planner that they can trust and know their money is in the right hands will select the more qualified worker. Clients may refer to their wanting a CFP® who is a fiduciary; having the clients needs in front of their own. "Brokers and advisers should be bound by similar fiduciary standards," commented Arthur Levitt Jr., former SEC commissioner (2).

Many financial planners are also registered as investment advisers or hold insurance or securities licenses that allow them to buy or sell products. Ethical financial planners should send you to a more specialized financial adviser for services they cannot provide and should disclose any referrel fees they receive in the process. These advisers should also refer you to a planner if they cannot meet your financial planning needs.

One of the issues of becoming a financial planner is deciding what car...

... middle of paper ...

...f your compensation based on selling products?

o Yes

o No

Explain:

c. Do professionals and sales agents to whom you may refer me send business, fees or any other benefits to you?

o Yes

o No

Explain:

d. Do you have an affiliation with a broker/dealer?

o Yes

o No

e. Are you an owner of, or connected with, any other company whose services or products I will use?

o Yes

o No

Explain:

16. Do you provide a written client engagement agreement?

o Yes

o No

If no, why not? (5)

Resources cited

(1) Kapoor, Dlaboy, Hughes. Personal Finance, 8th Edition. Pg 5

(2) "Merrill Rule" a Bad Deal for Individual Investors. www.bloomberg.com. 11/7/06.

(3) www.sec.gov

(4) Gevlin, Kathy. "RIAs Decry ‘Merrill Lynch' Rule." Nov. 1, 2005.

(5) Checklist for Interviewing a Financial Planner. http://www.cfp.com/learn/knowledgebase.asp?id=8

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