Do All Financial Planners Practice What Their Designations Preach?

Conrad Toner |

In my last post I talked about the importance of finding a financial planner with a “relevant” designation for the job you need done.  In today’s post I want to talk about the need to work with a planner who practices the principles of the designation(s) they hold.  That is, are they actively using the specialized knowledge that came from getting the designation in the day to day activities with their clients?  Are they creating financial plans or just selling products?

As strange as it may seem, some financial advisers have taken the time to get a designation, yet don’t actually practice the principles that the designation represents. Even though they may be required to meet continuing education requirements and follow a code of conduct, they may have no intention of using what they learned to produce written financial plans. This begs the question of why did they bother to get a designation in the first place?

Some get it only for the credibility factor – having a professional designation looks good on the business card. Still others are required to get one as a condition of employment. Yet some folks have no interest in putting in the time required to use it to its full potential. They may be too busy trying to fill sales quotas and win sales contests to be bothered doing all the real planning-work required when writing a financial plan or retirement income plan. Bottom line – simply having a particular designation doesn’t automatically  mean an adviser is qualified to help you.  They must also actively use the principles at the designation’s core.

How can you find out if the prospective adviser you’re considering will actually use the specialized knowledge of their designation to your benefit?

In my book – Fearless Retirement I have an entire chapter dedicated to this question.  I even include a detailed questionnaire to help you determine if your adviser is planning or transaction focused.  It’s by determining this focus that you can find out if they are truly a “practicing financial planner”.

The top 10 questions you’ll want to ask:

1.  Do they use a letter of engagement before the works begins?

2.  Do they offer both segmented and comprehensive financial planning services?

3.  Do they specialize in a particular area of planning – retirement planning, estate planning or general financial planning?

4.  Do they use a comprehensive documents checklist and questionnaire to gather all the important financial data about your situation?

5.  Do they use some type of values checklist or goals questionnaire to determine what is truly important to their clients?

6.  Do they provide a detailed risk analysis showing all the potential risks that their clients situation is exposed to?

7.  Do they provide a comprehensive written analysis (plan), with more than one recommendation?

8.  Do they offer assistance to implement the plan, and if not do they have a referral arrangement with other professionals?

9.  Do they offer ongoing  monitoring and advice related to the implementation of the plan?

10.  Can they provide you with a sample plan and references of clients who have gone through the planning process?

If the answer is no to many of these questions then the adviser may simply be a transaction-based salesperson with letters after his name.


Once you’ve found someone that practices the principles of a relevant designation, there’s one final thing you need to consider.  My next post will discuss the issue of the requirements to get and keep a particular designation and why that’s important to your future financial well being