In our volatile economy, many people need good advice on developing a solid financial plan. Perhaps its time for a certified financial planner, a well-trained professional, to help you design a personal financial plan. Test your knowledge about certified financial planners by taking this quiz.
Who actually needs the services of a certified financial planner (CFP)?
A certified financial planner is mainly for wealthy people.
A certified financial planner is for individuals making a minimum of $60,000 a year.
A certified financial planner is for anyone with debt, saving for retirement or planning to own a home.
A CFP can be a very good investment for anyone that:
is interested in becoming an investor in unusual investments
is not sure how to handle financial decisions
is interested in exploring methods to increase their income
How does a CFP decide the best way to help a client?
A CFP will carefully examine all the elements of your current finances.
A CFP will examine your finances and help you with bankruptcy proceedings.
A CFP will obtain your credit reports before helping you to improve your credit score.
What can you expect from a CFP after the work of setting a financial plan is finished?
Your CFP is finished with you once you have developed a financial plan together.
Your CFP will authorize transfer of funds from your bank accounts as dictated by your financial plan.
Your CFP will follow-up with you on a regular basis to help keep you on track with your financial plan.
What is the purpose of the Certified Financial Planner Board of Standards in the United States?
ensures that CFPs have their clients’ best fiduciary interests in mind
sets guidelines for the way fee-paying members conduct business
develops college level educational programs for training of CFPs
In order to be designated as a CFP, candidates must meet educational requirements and then pass:
a nationwide test that takes six hours over two days
a nationwide test that takes 10 hours over two days
a nationwide test that takes 14 hours over two days
How many kinds of CFPs are there?
If you hired a fee-only CFP, how would you be charged?
a percentage based on your debt load
a retainer in addition to billing hours
by a set hourly rate
What is the typical range of hourly rates for a fee-only CFP in the United States?
$75 to $170 an hour
$125 to $350 an hour
$225 to $400 an hour
What do financial experts recommend when it comes to hiring a CFP?
Experts recommend that you shop around to compare rates and reputations before making a decision.
Experts recommend that you locate a CFP in the yellow pages and call them for references before hiring.
Experts recommend that you attempt to find a fee-only CFP before using one that works on commission.
What can be a negative aspect when attempting to hire a fee-only CFP?
fee-only CFPs are extremely busy
fee-only CFPs typically want only wealthy clients
most CFPs work on commission
What is a disadvantage of working with a commission-only CFP?
They may recommend a financial vehicle that is not your best option.
They typically spend less time than they should to analyze your financial situation.
They are not always aware of all the financial options available to you.
Approximately how many CFPs are there in the United States?
If you hire a CFP based on a flat fee payment to produce a financial plan, what should you expect to pay?
$1,500 to $3,700
$1,800 to $4,500
$2,000 to $5,000
Once you decide that you would like to hire a CFP, how do you find a reputable one?
Look in the yellow pages.
Ask your bank manager.
Ask family, friends and colleagues .
What else should you do before you select a CFP to work with you?
Call several to obtain price quotes.
Interview the candidates.
Choose a CFP with an office nearby.
What piece of knowledge do you need when you head out to start your interviews?
the value of your assets
the value of insurance policies
what you need help with
What do you need to find out about your CFP if you require their advice on investment options?
Check if your potential CFP has any investment experience.
Determine which investment vehicle the potential CFP prefers.
Check if your potential CFP is licensed to give investment advice.
You have done your homework and like a CFP that is based in a large office, what else do you need to know before you sign on?
Are there any additional charges for secretarial services?
Is he or she available during normal office hours?
Will work on your account be shared with other financial planners?
What should you do once you have finalized the services that will be provided and the associated fees that you will be paying?
Gather up your financial records and get to work on that financial plan.
Check for ethical violations with professional organizations’ where your CFP is a member.
Ask your new CFP to put the details of your agreement in writing and give you a signed copy.