If you have a financial planner, get your plan!

If you’ve been monitoring my FP columns and Wealthy Boomer columns the last week (see scrolling lists to the right of this blog), you’ll see a recent focus on financial planning. My Saturday column in the Financial Post simply reported on the annual symposium held last Wednesday by the Financial Planning Standards Council.

Even so, readers and even certified financial planners (CFPs) themselves seem to be surprised by the revelation by the cream of the FPSC’s own membership that many clients of financial planners don’t automatically receive a comprehensive financial plan at the start of the relationship. My blog on Monday shows some of the reaction, including from one RFP or Registered Financial Planner (who regard themselves as an advanced form of CFP). See IAFP.ca.

Financial planning is key element of The Findependence Day Model

Let me make it clear, as anyone who has read the book and this web site devoted to it, that I’m fully in favor of most investors engaging a financial planner, ideally a fee-only or at least a fee-based one, as opposed to one paid by commissions on product sales. I’ve argued that the heart of what I call The Findependence Day Model is a self-directed investor who buys ETFs or individual securities through a discount brokerage but ALSO receives guidance through a fee-only or fee-based advisor or financial planner.

In the book, there are not one but TWO characters who are CFPs: Theo, the grizzled veteran who has achieved his own Findependence Day and charges a low annual fee for clients who want to mimic his personal portfolio; and Bernie, the frugal financial planner who moonlights as a record store owner.

It should be obvious that if you’re paying someone to be your financial planner, then you should be getting a financial plan. If you’re paying on a fee-based model (i.e. asset-based), then the comprehensive financial plan should be included. If you’re paying on a fee-only basis, then it’s quite acceptable for the financial planner to invoice you for the preparation of this detailed plan prepared at or near the onset of the relationship.

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