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What Type of Professional Are You Talking With?

Most financial planners are investment advisors, but not all investment advisors are financial planners. Some financial planners assess every aspect of your financial life—including saving, investments, insurance, taxes, retirement, and estate planning—and help you develop a detailed strategy or financial plan for meeting all your financial goals.

Others call themselves financial planners, but they may only be able to recommend that you invest in a narrow range of products, and sometimes products, that may not even be securities.

Why Choose a CFP® Professional

You deserve a holistic financial roadmap. Only CERTIFIED FINANCIAL PLANNER™ professionals are rigorously trained in 72 areas of financial expertise and must accrue thousands of hours of experience prior to earning their certification. With a CFP® professional, you get a financial planner partner committed to working in your best interest and the confidence that comes with building a comprehensive plan.

Before you hire any financial professional, you should know exactly what services you need, what services the professional can deliver, any limitations on what they can recommend, what services you’re paying for, how much those services cost, and how the advisor or planner gets paid.

Is the Advisor a True Advisor?

An independent advisor has the right to reach across company lines and get his or her client the product or portfolio that is best for the client. An advisor who is restricted or who is limited can offer only what the company he/she works for offers. This is common with the big name brokerage firms and captive insurance companies. It is important to understand that dealing with a limited range of financial products could have an adverse effect on your financial goals.

Does the Advisor Have an ADV Brochure?

Form ADV is the uniform form used by investment advisors to register with both the Securities and Exchange Commission (SEC) and state securities authorities. The form consists of two parts. Part 1 requires information about the investment advisor’s business, ownership, clients, employees, business practices, affiliations, and any disciplinary events of the advisor or its employees. Part 1 is organized in a check-the-box, fill-in-the-blank format. The SEC reviews the information from this part of the form to process registrations and manage the firm’s regulatory and examination programs. Although designed for a regulatory purpose, investment advisor filings of Part 1 are available to the public on the SEC’s Investment Adviser Public Disclosure (IAPD) website at www.adviserinfo.sec.gov.


Beginning in 2011, Part 2 requires investment advisors to prepare narrative brochures written in plain English that contain information such as the types of advisory services offered, the advisor’s fee schedule, disciplinary information, conflicts of interest, and the educational and business background of management and key advisory personnel of the advisor. The brochure is the primary disclosure document that investment advisors provide to their clients. When filed, the brochures are available to the public on the IAPD website.

What Services Does the Advisor Offer?

An investment advisor should have the ability to discuss investment-related tax issues, assess your risk tolerance and build a total plan for not only your future, but the future of your legacy as well. Risk tolerance, level of income, personal preferences, capital needs, children’s future needs, estate planning, insurance needs and sources of retirement income should all be discussed by your advisor. If these items and more are not discussed, you might need to look for another advisor. Choosing the wrong advisor can mean losing years of your future. Start a plan with your chosen advisor and continue to evaluate your progress. An advisor typically requires an annual meeting with clients.

How Does the Advisor Get Paid?

This is an important question to ask anyone with whom you do business but especially an advisor/ planner.
There are three main ways an advisor gets paid:

  • Through offering commissionable insurance products.

  • Through offering commissionable securities products.

  • Through charging a fee for creating a financial plan or managing your money.

Does the Advisor Accept Fiduciary Responsibility or Are They Held to a Suitability Standard?

Deciphering the “What’s What” and “Who’s Who” of today’s complex financial services industry can be difficult, even for the most financially sophisticated members of the general investing public. Two words, fiduciary and suitability, are critical in understanding the motivation behind the person offering you financial products or advice.
Recognizing the difference between fiduciary and suitability standards may also help you to appreciate the level of care you receive from a trusted financial advisor. Although the distinction between the fiduciary and suitability methods of offering advice is rarely discussed by “broker-led” large financial companies, we feel it is essential for investors to know the difference.

BROKER (the suitability standard):

  • Offers products for sale from a range of products carried by the company he or she represents and the suitability guidelines set by said company and FINRA.

  • Is paid commissions calculated as a percentage of the amount of money invested into the product

ADVISOR (the fiduciary standard):

  • Offering investments that are in the best interest of the client

  • Is paid a monthly fee calculated as a percentage of the assets under advisement

“What’s What” relates to the standard of care upon which financial advice is provided to the investing public:
The fiduciary standard requires advice to be provided in the best interests of the client including the disclosure of possible conflicts of interest.


As an investment adviser representative, I am a “fiduciary” to my advisory clients’ investments. This means that I have an obligation to act in the best interests of my clients and to provide investment advice in my clients’ best interests. I should avoid engaging in any activity that could create a conflict of interest with any client; however, if a conflict of interest does arise, I will make full disclosure of that conflict to my client. I must employ reasonable care to avoid misleading clients and I must provide full and fair disclosure of all material facts to my clients and prospective clients. My fiduciary duty extends solely to investment advisory advice and does not extend to advice relating to insurance product sales, including annuities, life insurance, and long-term care insurance.

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