Working with a financial planner can be an extremely rewarding experience, but it’s important to understand both your responsibilities and your rights in this professional relationship. Here’s what you should expect:
If a financial planner takes her professional obligations seriously, she will have your best interests in mind, always tell the truth, keep her promises and make sure you are fully informed.
Your job When you’re checking references for a new planner, ask other clients how they feel about these key issues. If they seem unsure or hesitant, follow up with other references until you’re satisfied. If you’re not sure about your planner’s integrity, move on.
Count on your planner to carefully consider your particular situation using her expertise and judgment. She should provide you with advice that best meets your goals. That does not mean you’ll always hear what you want, but she should be able to suggest alternative goals or priorities.
Your job Listen to your planner and take her advice. But if you don’t understand something, ask. Don’t just nod and then ignore. Or worse, don’t just do something because she said so. It’s your money, so you had better know what’s going on.
Look for a certified financial planner (CFP) or registered financial planner (RFP) designation. But don’t stop there. Ask what other continuing education courses she has been taking to remain up-to-date. If your situation requires expertise that she does not possess, she should be able to suggest other professionals who can assist you.
Your job Now that you’re working with a planner, you’ve made a commitment to be informed about your own financial situation so you can discuss your money in a smart and sensible way. Be active and don’t just rely on her guidance.
Your planner should explain the risks associated with her financial recommendations and any potential conflicts of interest. For example, does she gain personally or financially from your purchase of a particular product or from the direct outcome of a suggested strategy? Is the company she works for associated with the investments she offers?
Your job Cough up all the financial facts, including your mistakes. If you hold back, she won’t know the full picture and you could end up with bad advice.
To get the best results from your financial planning relationship, you’ll have to tell all. Your planner must keep this information in confidence, only sharing it with others to conduct business on your behalf and only with your consent.
Your job Trust her. Keeping hidden pots of money or your dreams secret from your planner just makes her job more difficult.
Once the planner has determined that she can help you, she should make written recommendations that are suitable for you. You can always make changes on the fly, but there should be some documented follow up that shows all the changes. Keeping it loose only means you’ll have nothing to fall back on if something is done that you didn’t expect. And always ask for a clear statement of what services she’ll provide and at what price.
Your job Keep your records organized. Have a notebook for writing down the essence of your conversations with your planner, the date and action (if any) to be taken.