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Financial Planning Series: How to Start the Financial Planning Process

Andrew Paoni

Jan 7 2020

2 min read

How Can You Engage in a Financial Planning Process?

What are the ways that clients can work with a Certified Financial Planner (CFP®) to engage in a Financial Planning process?

If you are working with a CFP®, you can work with them in several different ways, including on an engagement basis, hourly basis, or as a component of the overall wealth management process, in which a CFP® plans and manages assets for you.

A financial planning engagement will outline how the CFP® and you will work together based on a defined set of criteria, such as retirement planning or educational planning for a child. The engagement fee may be a flat or hourly fee depending on the scope of the engagement.

If you work with a CFP® on an hourly basis, the fee will be based on the time the CFP® spends working with you (for example, $250 per hour). The number of hours it takes to complete an engagement will depend on the complexity of the plan.

A flat engagement fee gives the client a little more certainty about costs, while the hourly fee can vary depending on continuing questions or communication.

It is possible to initiate the financial planning process during the normal course of a wealth management relationship. For example, if a financial advisor manages accounts for a client, they may include a financial plan as part of the overall relationship. If this is the situation, you’ll need to understand how the advisor is getting paid. Find out if this is a fiduciary relationship, meaning do they have to do what is in the best interest of the client? Are they getting paid a fee to manage the portfolio or are they making a commission by selling you a product? This can get confusing and may require you to ask more questions.

You should feel comfortable in your relationship with your planner. If you don’t feel comfortable, it is best to move on and interview other CFPs® until you find one with whom you feel comfortable working with.

Advisory services offered through Sikich Financial, an SEC Registered Investment Advisor.

Securities offered through Triad Advisors, Member FINRA and SIPC. Triad Advisors and Sikich Financial are not affiliated.

This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. In addition, this publication may contain certain content generated by an artificial intelligence (AI) language model. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

About the Author

Andrew Paoni

Andrew Paoni, MBA, CEPA, CFP®, CFA, specializes in portfolio management and financial planning, helping clients learn how to reach their personal financial goals. Andrew has over 15 years of experience as a financial advisor and assisting clients in spending and saving money efficiently so that they can enjoy a successful financial future.