Do You Know your Financial Planner? Is the difference between Financial Advisor, Financial Planner and Investment Manager? Who does your planner really work for? How is your planner compensated? Who am I? – Career Path

When you hear the term “Financial Advisor,” what do you think of? This guy?

When you hear the term “Financial Advisor,” what do you think of? Or this guy?

Why Is it So Confusing? Two studies came back with eye opening results - Consumers aren’t getting what they are asking for 31% Received 2 or fewer services 30% Believed they didn’t get what they needed 27% Wanted a Financial Plan but didn’t get one -Perceived similarity among financial titles 82% of consumers believe FP and FA are the same 70% of consumers believe FP and Wealth Manager 68% of consumers believe FP and Investment Advisor Financial service providers contribute to consumer confusion by identifying themselves as financial planners despite providing limited services. (2013 Cerulli Associates)

6 Financial Advice Who Does What?? Insurance Sales Agents* 440,000 Approximate Financial Related Licenses Held in the United States* 800,000 Financial Services, Commodity and Securities Sales Professionals* 360,000 Financial Advisors in the United States* 223,000 Certified Financial Planner Practitioners in the US¹ 70,000 Certified Financial Planner Practitioners in Delaware¹ 261 Financial Planners who ask for tax returns annually³ 3% Financial Planners who actually do Financial Planning² 26% Data Sources: *Bureau of Labor Statistics, 2012 ( ¹ 2014, ²Cerulli Associates, Boston Based Research Firm, 2014, ³

Who is the Planner really working for? There can be a lack of transparency around a planner’s relationships Insurance Based—Firm has a primary focus on proprietary insurance products. Also known as the agency system. Investment Based—very little focus on planning and main concentration is on investment products. Financial Planner—primary focus is on goal based planning and advice. Often offers investment management as well. Works for the client.

How are Planners Compensated? Type of Planners—AKA How They Make Money Fee Only—charges a fee for advice and investment management. Implementation? Fee Based—charges a fee for advice and investment management and may receive compensation for implementation Commission Based—only receives compensation when a product is purchased. “Financial Plans” often offered at no charge

Tips when interviewing a Financial Planner CFP® Planning or Product Focused How are fees charged?—Remember the “All-In” Charge “Secret Sauce” aka Investment Prowess Role as a Fiduciary Conflicts of Interest—Clearly Defined? Role on Client’s Advisory Team How Often is the Plan Updated—1 Free Plan