who is a financial planner? chapter 2 tools & techniques of financial planning copyright 2009,...
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Who Is a Financial Planner? Chapter 2Tools & Techniques of
Financial Planning
Copyright 2009, The National Underwriter Company 1
Professional Financial Planning – The Focus of This Course
A Professional Financial Planner is a person who has earned the right by
acquisition of knowledge and dedication to the financial security of others (not simply by charging a fee or commission) to call
himself or herself a professional.
Who Is a Financial Planner? Chapter 2Tools & Techniques of
Financial Planning
Copyright 2009, The National Underwriter Company 2
A Financial Planning TeamYou Cannot Go It Alone
A CFP®, ChFC, or CPA/PFS for specific financial advice.
A CPA for tax matters.
A tax attorney for legal matters & drafting documents.
A CLU for life insurance.
A CPCU for property and liability insurance.Even a sole practitioner will work with these other professionals – it may be people the professional chooses or the client’s existing advisors – no one is an expert on everything.
Who Is a Financial Planner? Chapter 2Tools & Techniques of
Financial Planning
Copyright 2009, The National Underwriter Company 3
Who Leads the Team?
Usually, whoever initiates the process – most often a CFP® professional, a ChFC or a CPA/PFS.
The client is the most important member of the team and his or her wishes are the driving force.
Who Is a Financial Planner? Chapter 2Tools & Techniques of
Financial Planning
Copyright 2009, The National Underwriter Company 4
What the Professional Must Do
1. Uncover strengths and weaknesses and impress on the client the urgency of action.
2. Discuss viable alternatives
3. Explain what should be done and why
4. Match the plan to what the CLIENT really needs and wants
5. Match the plan to the client’s risk propensity, investment philosophy and priorities
6. Explain understandably why the client’s present arrangements will not allow them to meet their goals.
Leave out one of these, and it is unlikely the client will change his or her ways.
Who Is a Financial Planner? Chapter 2Tools & Techniques of
Financial Planning
Copyright 2009, The National Underwriter Company 5
More About What a Financial Planner Must DoResults of a College for Financial Planning Study*
• Evaluate client needs
• Explain financial planning concepts
• Clarify client goals
• Analyze information
• Prepare comprehensive financial plans
• Implement comprehensive financial plans
• Monitor comprehensive financial plans
• Establish and maintain accurate records and perform other professional functions.
*Study by Dr. Larry Skurnik.
Who Is a Financial Planner? Chapter 2Tools & Techniques of
Financial Planning
Copyright 2009, The National Underwriter Company 6
Core Competencies
Regardless of specialty, the lead member of the team should have a working knowledge of :
– Risk and Reward and risk management
– Taxes - federal and state level
– Wealth and asset management
– Retirement and education planning
– Estate Planning
Who Is a Financial Planner? Chapter 2Tools & Techniques of
Financial Planning
Copyright 2009, The National Underwriter Company 7
First Steps to Action
Learn:– The client’s long, intermediate and short range goals– The client’s problems and opportunities to achieve goals– What each of the other advisors have already done for the
client– What each of the other advisors may be able to contribute to
improve the plan
Who Is a Financial Planner? Chapter 2Tools & Techniques of
Financial Planning
Copyright 2009, The National Underwriter Company 8
Client Centered Planning
Give the client ample opportunity to express his or her goals.Make sure that the client understands each recommendation and why it is being made.
A client who feels that his or wishes were not recognized or respected and who does not understand the plan will resent the plan, not implement it and feel that the planner’s fee is unreasonable.
Who Is a Financial Planner? Chapter 2Tools & Techniques of
Financial Planning
Copyright 2009, The National Underwriter Company 9
“The planner must have competence in many areas and compassion and concern for the financial and emotional well-being of others.”
Who Is a Financial Planner? Chapter 2Tools & Techniques of
Financial Planning
Copyright 2009, The National Underwriter Company 10
Financial Planning Credentials
• Certified Financial Planner™ (CFP®)
• Chartered Financial Consultant (ChFC)
• CPA/Personal Financial Specialist (CPA/PFS)According to the CFP Board of Standards, Inc., there are more than 88 different financial planning and financial planning related credentials. The three above represent the most comprehensive and widely recognized credentials. There are approximately 45,000 CFP® professionals, more than 40,000 people have graduated from the American College’s ChFC courses, and there are about 3,000 CPA/PFS professionals.
Who Is a Financial Planner? Chapter 2Tools & Techniques of
Financial Planning
Copyright 2009, The National Underwriter Company 11
Professional Organizations & Institutions
Financial Planning Association
The Society of Financial Service Professionals
The College for Financial Planning
CFP Board of Standards, Inc.
The American College
National Association of Personal Financial Advisors