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Financial planners advise their clients on many aspects of finance. Although they seem to be jacks-of-all-trades, certified financial planners do not work alone: They meet with their clients' other advisers, such as attorneys, accountants, trust officers, and investment bankers. Financial planners fully research their clients' overall financial picture. After meeting with the clients and their other advisers, certified financial planners analyze the data they have received and generate a written report that includes their recommendations on how the clients can best achieve their goals. This report details the clients' financial objectives, current income, investments, risk tolerance, expenses, tax returns, insurance coverage, retirement programs, estate plans, and other important information.
Financial planning is an ongoing process. The plan must be monitored and reviewed periodically so that adjustments can be made, if necessary, to assure that it continues to meet individual needs.
The plan itself is a set of recommendations and strategies for clients to use or ignore, and financial planners should be ready to answer hard questions about the integrity of the plans they map out. After all, they are dealing with all of the money and investments that people have worked a lifetime to accrue.
People need financial planners for different things. Some might want life insurance, college savings plans, or estate planning. Sometimes these needs are triggered by changes in people's lives, such as retirement, death of a spouse, disability, marriage, birth of children, or job changes. Certified financial planners spend the majority of their time on the following topics: investment planning, retirement planning, tax planning, estate planning, and risk management. All of these areas require different types of financial knowledge, and planners are generally expected to be extremely competent in the disciplines of asset management, employee benefits, estate planning, insurance, investments, and retirement, according to the Certified Financial Planner Board of Standards. A financial planner must also have good interpersonal skills, since establishing solid client-planner relationships is essential to the planner's success. It also helps to have good communication skills, since even the best financial plan, if presented poorly to a client, can be rejected.
Clients drive the job of financial planners. The advice planners provide depends on their clients' particular needs, resources, and priorities. Many people think they cannot afford or do not need a comprehensive financial plan. Certified financial planners must have a certain amount of expertise in sales to build their client base.
Certified financial planners use various ways to develop their client lists, including telephone solicitation, giving seminars on financial planning to the general public or specific organizations, and networking with social contacts. Referrals from satisfied customers also help the business grow. Financial planners may also use social media, such as LinkedIn and Twitter, and blogs to discuss financial planning and their services.
Although certified financial planners are trained in comprehensive financial planning, some specialize in one area, such as asset management, investments, or retirement planning. In most small or self-owned financial planning companies, they are generalists. However, in some large companies, planners might specialize in particular areas, including insurance, real estate, mutual funds, annuities, pensions, or business valuations.