Steps to ensure you are getting real financial planning

Published by vicky on

A financial planner should demonstrate competency in cash flow, investments, retirement, tax, estate planning, risk management and insurance, and education funding.

  • Ask questions of a prospective financial planner to ensure he or she does, in fact, have the financial planning chops to help manage your finances.
  • Remember, financial planning is not purely about investments or insurance.


The benefits of working with a financial planner are well documented. But to realize those benefits, you had better be sure the professional in whom you are entrusting your financial well-being — and, likely, your assets — has the right combination of core competencies and expertise.

To call him- or herself a financial planner, a financial professional should be trained and have demonstrated competency in multiple areas of finance, including cash flow, investments, retirement, tax, estate planning, risk management and insurance, and education funding. Professionals must also be able to demonstrate their ability to integrate the applicable areas into a cohesive plan that helps individuals determine if they are on track to achieving their stated goals.

It’s a case of “buyer beware.” So how can you know for sure what you will receive from someone professing to be a “financial planner” or offering “financial planning” is really delivering on what they are promising? Here are five initial questions you can ask of your prospective financial planner to know for sure.

1. What is your information-gathering process, and what does it include? The entire financial planning process is predicated on the financial professional having a thorough picture and understanding of an individual’s, a couple’s or a family’s financial life and their goals, both short- and long-term. Financial planners, especially those who are certified financial planner (CFP) professionals, are trained to perform a complete data-gathering process with all their clients, allowing them to see the big picture before making any recommendations to the client.

If the professional you are working with is only focused on gathering information about investments or insurance, they likely are not going to develop a complete financial plan.

2. What does your financial planning process entail? A financial planner must have the ability to synthesize all the information gathered about a person’s financial life and goals into a comprehensive, well-coordinated plan that connects that person’s assets to their goals. It’s also important for a financial planner to have, and follow, a well-defined planning process or methodology.

Financial planning is a process, not a product. The process used in creating a comprehensive plan allows the professional to recommend those products that make sense for you and your needs.

3. How will you work with other professionals in developing and executing my financial plan? Serving a client’s financial planning needs requires the right team of professionals working together. That means financial planners should be experts in coordinating, and working as part of, a team. When the situation calls for it, they need to collaborate with other specialists in certain areas to augment their own expertise.

Those other professionals may include a certified public accountant or enrolled agent who can help with tax planning strategies or an estate attorney who is skilled in all areas of estate planning.

“it’s critical not to lose sight of the fundamental skills and attributes that set true financial planners apart from professionals who claim the title but lack the training, competence and expertise to substantiate it.”

4. What is your area of specialization, and how will you help me in areas where you don’t have a specialty? It’s rare to find a professional who has expertise in every single area of financial planning outlined earlier, so it’s important that he or she can ask the right questions and work with you to find the right answers and solutions. Those professionals who do financial planning have access to networks and services that will enable them to address the many specific needs and challenges you face.

5. How will you communicate with me to make the plan crystal-clear? The strategies, maneuvers and products involved in financial planning can seem complex, particularly to a layperson. It’s critical that professionals be able to clearly and understandably explain how they do business (e.g., the fees they charge and the processes, strategies and products they use) and the rationale behind the recommendations they make and the actions they undertake on your behalf.

There is both art and science to financial planning, which requires the right skills, knowledge and experience to master. And there are financial planners out there for everyone, no matter your assets, your age or your position in life. So ask the right questions of a financial professional and ensure what you are receiving is real financial planning — and not just lip service.

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