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FAQs | Board of Standards
Q. Briefly, what is the role of a financial planner?
A. Professional financial planners assist their clients in managing, sheltering and expanding their assets through the development of a comprehensive plan geared toward a client's financial objectives and resources.
Q. Who needs and uses a financial planner?
A. Virtually anyone, from any income level, with income and expenses can use a financial planner. Concerns about inflation, changing tax laws and the need to plan early for retirement are more prevalent than ever before.
Q. How do financial planners charge for their services?
A. Some planners earn a commission on financial products they sell to their clients. Others charge a flat fee for developing a financial plan. Most use a combination of both - fee plus commission. In the latter case, planners prepare financial plans for an agreed upon fee. If the client requests that the plan be implemented, the planner can do so, often earning a commission on products purchased by the client. Some planners work in partnership, whereby one planner develops a plan and the other implements it.
Q. How does a client know he/she is getting objective investment advice if the planner's income is derived from commissions on the sale of recommended products?
A. A client should ask his or her planner what products earn the planner a commission - and if so, how much. Your planner should offer a variety of investment choices to choose from and should not be biased toward one product over any others.
Q. How do consumers know when they are being well served by their planner?
A. Planners are performing favorably if they have requested a client's financial data and objectives, provided a detailed plan and explanation, anticipated the effects of inflation, recommended practical investments, and suggested a course of action and time frames necessary to implement the client's financial plan.