By Larry Weiss
Learn more about Larry on NerdWallet’s Ask an Advisor
People have many different opportunities to seek financial advice. Some people go online, others go to large wire houses, their bank, hedge funds, neighbors or good old uncle Charlie.
Many firms promote their services because they have “special research knowledge” that will provide you wonderful results. The business model is always based on your belief that they will provide you superior results. Almost unlimited money is spent on advertising hoping to convince you of their magnificent abilities. But unfortunately unless their name is Warren Buffett their results usually come up short.
People can benefit the most from a professional who has good broad financial knowledge: a person trained as a Certified Financial Planner.
A Certified Financial Planner can help you in many ways. Some CFP’s work with executives at publicly traded corporations; others will specialize in helping start-up entrepreneurs plan for their next step. But the vast majority of CFP’s work with people down the street from young families starting out to your neighbor next door thinking about retirement.
For most families there are a full range of financial topics that they need help with to make the right decisions. Working with the right CFP you will develop a plan to meet your lifetime goals. Your plan will consist of short term steps that create the roadmap to fulfill your needs and dreams. In many ways your CFP will become your partner in helping you get where you want to be. Sometimes there will be difficult conversations about finance, family circumstances and life changes.
In addition to having a knowledge of investments many CFP’s have knowledge in other areas from college funding, life insurance, estate planning, stock options, social security planning and long term care planning. Despite a wealth of knowledge CFP’s sometime work with clients that will have questions or needs in a specific area. You will hear a CFP say “that is not my expertise, but I will get you the information you need and refer you to right person that is an expert.” Most CFP’s have relationships with other professionals in many different fields.
The CFP profession has developed financial planning practice standards that guide their professionals in the financial planning process. CFP professional standards that are listed below:
- Establishing and defining the relationship with the client,
- Gathering client data,
- Analyzing and evaluating the client’s financial status
- Developing and presenting the financial planning recommendation,
- Implementing the financial planning recommendation(s)
What is the best approach when you are interviewing potential advisors? For many people this can seem a daunting task. I believe a successful approach would be to envision a visit to a new family doctor for you or your family. You want this relationship to last for many years and to be flexible based on your needs.
Ask lots of questions that are important to you:
- How do your work with clients?
- How often do we meet during a year?
- What areas are you most knowledgeable in?
- What kind of communications will I receive from you?
- Talk about your needs!
- Do you have a fiduciary responsibility if I am your client?
- How much do you charge? And how do you get paid?
One of the most rewarding aspects of being a CFP is many of your clients will amaze you. Every individual has an interesting life story to share. As you develop your relationship overtime you will be educated and in awe of people’s hard work, fortitude and success. Working with clients and families helping them achieve their goals can lead to great professional satisfaction. Many relationships developed with people can be very fulfilling and long lasting. It is truly an honor to a small part of their journey.
Larry Weiss CFP ®, CPA
Securities and investment advisory services offered through NEXT Financial Group Inc., Member FINRA/SIPC. NEXT Financial group does not provide legal or tax advice.