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| You may ask, what is the difference between a general financial professional and an individual financial planner? In reviewing your financial problem, a general financial professional concentrates mainly on a special area. In contrast, a financial planner always takes into account the “bigger picture.” Whereas a general financial professional provides one-stop service, a financial planner examines his service to his customers regularly, offering corrections and new proposals, and provides continuing service so that the customers can realize their long-term financial objectives. |
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| A financial planner concentrates mainly on his customer’s needs. Financial professionals such as investment consultants, insurance planners, insurance agencies, and tax accountants concentrate on a particular area of financial problems, whereas the financial planner determines his customer’s financial status comprehensively, drawing appropriately upon his education and experience, and satisfying his customer’s many needs in a harmonious manner. |
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| The government has yet to exercise legal control over financial planners. Instead, a financial planner is managed legally with regard to the individual service professionally provided. For example, a financial planner providing insurance policy service is controlled as an insurance planner or as an insurance agent. As a result, anyone who provides financial advice can call themselves a financial planner, without limit. In fact, financial professionals who do not provide overall services sometimes call themselves financial planners. To pick a true financial planner, ask yourself the following questions: |
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| A financial planner should satisfy high levels of ethics, honesty, and reliability, as well as demonstrate an excellent degree of competency. |
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Check how long the financial planner has worked in her field, and confirm the types of companies where she has developed her experience. Inquire briefly about the financial planner’s past experiences, as well as how these experiences have influenced her present work. |
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Inquire what certification the financial planner holds in relation to the financial planning service he provides. In particular, ask if he has received CFP/AFPK certification. Try to find a financial planner who can prove his certification in the many areas of financial planning, insurance, investment, real estate, tax, and retirement planning. |
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Each financial planner’s service differs according to several factors including her certification, experience, and professional field of expertise. Legal requisites apply if a financial planner intends to sell investment products such as insurance policies or mutual funds. Some financial planners choose not to sell financial products, but instead focus solely on providing financial planning advice. The financial planner should also have special qualifications that allow the planner to be professionally paid for her advice in a particular area, be it legal or tax advice. |
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As a customer, ask yourself what financial matters you intend on delegating to the financial planner. Check whether the financial planner is too prudent or too aggressive. In addition, check if the financial planner does the financial planning by himself or whether other persons will also have a certain degree of control. |
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A financial planner may work alone or with other support personnel. When a financial planner utilizes the services of professionals specializing in other fields, ask him for a list of such personnel in order to confirm their experience and certification. |
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When a contract for a particular service has expired, the financial planner should clarify all service charges in writing. Most often than not, the financial planner is paid by his company directly or receives a commission from a financial company based on his sales of their financial products. Note, however, that there are more and more financial planners who receive payment based on other methods; for example, they are paid according to the contents of the services provided. Also note that in foreign countries such as the USA, methods such as payment according to the service duration, payment as a ratio of managed assets and income, and payment according to the amount of work provided plus a commission from product sales are used. |
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The service fees of a financial planner differ according to each customer’s needs. Fees may include payments per task, a predetermined amount of pay, commission from product sales, or payments related to the financial planner’s particular proposals. When you review the content of a particular plan, ask the financial planner how much the fees are in advance. |
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In the course of handling customer needs, particular business relationships may have an influence on the professional judgment of the financial planner. In such cases, the financial planner may not be able to provide the best service to the customer. For example, a financial planner selling an insurance or investment product often has special relations with the financial companies providing the products. In such cases, the financial planner should provide the customer with a detailed explaination regarding any business-related financial company, insurance agency, accountant, or tax expert prior to the start of the service. |
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If financial professionals, particularly a financial planner, violate any law or regulation, they shall find themselves under control of the government, Financial Supervisory Service or autonomous control institution such as an association. Check whether your financial planner has a past record of violating any laws or regulations. A CFP/AFPK certificant should observe all ethics rules established by FPSB Korea; otherwise, violators are subject to disciplinary measures. If you want to know whether a financial planner has violated any of the ethics rules, contact FPSB Korea to examine the CFP certificant’s record. |
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Check whether a financial planner will prepare a detailed document specifying the contents of his service.
More importantly, keep the document that he provides. |
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