Fee-Only Financial Planning : How to Make It

J.K. Lasser Protrade; Before You Plan, Consult J.K.LasserInnovative Planning That Benefits Professionals and ClientsWhat does it take to be a successful fee-only financial planner? According to John Sestina, acclaimed "father of fee-only financial planning," the only special qualifications are a genuine desire to help people, an ability to listen, and a commitment to lifelong learning.Fee-Only Financial Planning introduces financial planners to the newest, fastest-growing niche in the financial planning field-fee for service rather than commission-based planning. Fee-only planning is attractive to the growing number of clients who want to avoid the long-term payments, lack of objectivity, limited choices, or conflict of interest that can occur with a commission-based payment structure.In his comprehensive how-to guide and easy-to-use reference, John Sestina provides in-depth coverage of the financial planning field. He covers such topics as: The advantages and disadvantages of fee-only planning for both client and planner Making the transition from commission-based to fee-based planning Building a profitable practice with varied client bases Tailoring to your own work style the system Sestina developed over 35 years of successful private practice Developing and maintaining productive client relationships For professionals wondering whether fee-only financial planning is in their future, or for anyone in financial services who wants to stay current, Fee-Only Financial Planning is an eye-opening introduction to one of the financial world's freshest, richest entrepreneurial careers.

JOHN E. SESTINA, CFP, ChFC, a financial planner in private practice since 1965, is nationally recognized as the father of fee-only financial planning. A popular speaker, he cofounded the National Association of Personal Financial Advisors and its predecessor, the Society of Independent Financial Advisors. Mr. Sestina is President of John E. Sestina and Company and creator of The Sestina Network of Fee-Only Financial Planning Professionals.

Preface

xiii

Acknowledgments

xvii

Overview of Financial Planning

1

(8)

Skills of the Successful Financial Planner

2

(2)

The Planner as the Team Coordinator

4

(1)

Public Perceptions of Financial Planners

5

(1)

Origins of the Fee-Only Planner

6

(3)

Advantages of Fee-Only Planning

9

(6)

Advantages to the Client

9

(3)

Advantages to the Planner

12

(3)

Disadvantages of Fee-Only Planning

15

(8)

No Guarantee for the Client

15

(1)

You Must Service What You Sell

16

(1)

You Are Selling an Intangible

17

(1)

You Fail to Develop Sales Skills

17

(1)

You Receive No Subsidy

17

(1)

You Must Attract New Clients

18

(1)

You Must Create the Want

19

(1)

Still a Young Profession

20

(1)

Seek Out a Mentor

21

(2)

Making the Transition

23

(10)

Six Questions for the Would-Be Planner

23

(6)

Where Are You Coming From?

29

(4)

Succeeding with the Small Client

33

(8)

How Can I Service the Small Client and Still Be Profitable?

34

(1)

How Long Will It Take You to Get Started?

35

(1)

How Much Time Does a Client Take?

35

(1)

How Much Should I Invest in the Business?

36

(1)

Developing a System to Save Time

36

(2)

Attitude Adjustments

38

(3)

Establishing a System

41

(16)

How a System Helps You

42

(1)

How a System Helps Your Clients

42

(1)

Qualifying Clients

43

(1)

Organizing Client Information

44

(2)

The First Meeting (Prospective Client Meeting)

46

(2)

The Second Meeting (First Presentation Meeting)

48

(3)

The Third Meeting

51

(1)

The Fourth Meeting

52

(1)

Implementation

53

(1)

Common Implementation Errors

54

(1)

Management Review

54

(1)

Alternatives: In Style, but Not in Substance

55

(2)

Developing Client Relationships

57

(8)

Targeting Your Market

57

(3)

Encouraging Client Involvement

60

(2)

Establishing and Maintaining a Client Relationship

62

(3)

How to Market and Survive in a Fee-Only Practice

65

(10)

Marketing a Concept

66

(2)

Marketing Yourself---Some Tried-and-True Methods

68

(3)

Tried and Untrue Methods

71

(1)

A Commonsense Method

72

(3)

Structuring Your Office for Maximum Productivity

75

(12)

Inside versus Outside Experts

76

(1)

Setting Up Shop

77

(2)

Setting Goals for Your Business

79

(1)

Administrative and Professional Management

80

(3)

Computerizing Your System

83

(4)

Bringing In a Partner

87

(10)

The Psychological and Financial Aspects

88

(4)

Some Remedies; Few Cures

92

(5)

Fees

97

(130)

Appendix A Confidential Questionnaire

Figure A.1 Documentation Checklist

102

(3)

Figure A.2 Personal Information

105

(1)

Figure A.3 Advisor Summary

106

(2)

Figure A.4 Safe-Deposit Box and Marriage

108

(1)

Figure A.5 Personal Goals Summary

109

(1)

Figure A.6 Cash Flow Forecast

110

(2)

Figure A.7 Asset/Lifestyle Accounts

112

(2)

Figure A.8 Real Estate Interests

114

(1)

Figure A.9 Liabilities

115

(2)

Figure A.10 Credit Cards Summary

117

(1)

Figure A.11 Investment Accounts

118

(1)

Figure A.12 401 (k) Summary

119

(1)

Figure A.13 Business Interests Summary

120

(2)

Figure A.14 Partnership Interest Summary

122

(1)

Figure A.15 Employee Census Information

123

(1)

Figure A.16 Property and Casualty Insurance

124

(1)

Figure A.17 Life Insurance

125

(1)

Figure A.18 Health Insurance

126

(1)

Figure A.19 Disability Insurance

127

(1)

Figure A.20 Will---Husband

128

(1)

Figure A.21 Will---Wife

129

(1)

Figure A.22 Revocable Trust

130

(3)

Figure A.23 Testamentary Trust

133

(1)

Figure A.24 Durable Power of Attorney---Husband

134

(1)

Figure A.25 Durable Power of Attorney---Wife

135

(1)

Figure A.26 Health Care Proxy---Husband

136

(1)

Figure A.27 Health Care Proxy---Wife

137

(1)

Figure A.28 Health and Disability Insurance Planning

138

(1)

Figure A.29 Estate Planning

139

(2)

Figure A.30 Retirement Planning

141

(2)

Figure A.31 Education/Dependent Planning

143

(2)

Figure A.32 Income Planning

145

(1)

Figure A.33 Fee Calculation

146

(4)

Appendix B Second Set of Forms Needed

Figure B.1 Materials and Data Required

150

(2)

Figure B.2 Financial Planning Services Agreement

152

(2)

Figure B.3 Letter of Confirmation

154

(1)

Figure B.4 Sample Invoice

155

(3)

Appendix C Sample Worksheets

Figure C.1 Cash Flow Worksheet

158

(2)

Figure C.2 Disability Planning

160

(1)

Figure C.3 Education Planning

161

(2)

Figure C.4 Retirement Planning

163

(2)

Figure C.5 Estate Planning

165

(3)

Appendix D Implementation Checklist

Figure D.1 Implementation Checklist

168

(18)

Appendix E Third Set of Forms Needed

Figure E.1 Letter of Authorization

186

(1)

Figure E.2 Letter to Participating Advisiors

187

(1)

Figure E.3 Guidelines for Selecting a Financial Planner

188

(2)

Figure E.4 Uniform Application for Investment Advisor Registration (ADV)

190

(8)

Figure E.5 Financial Planning Book Table of Contents

198

(2)

Figure E.6 First Presentation Checklist/Annual Planning Checklist

200

(2)

Figure E.7 Update Checklist

202

(3)

Figure E.8 Authorization for Duplicate Confirmation Statements

205

(3)

Appendix F Client Master

Figure F.1 Financial Planning Checklist

208

(2)

Figure F.2 Document Location Summary

210

(1)

Figure F.3 Yearly Tickler

211

(1)

Figure F.4 Portfolio Model

212

(1)

Figure F.5 Buy-Sell

213

(1)

Figure F.6 Life Insurance Review

214

(2)

Figure F.7 Life Insurance---Husband

216

(1)

Figure F.8 Life Insurance---Wife

217

(1)

Figure F.9 Hospital Insurance Summary

218

(1)

Figure F.10 Dental/Vision Insurance

219

(1)

Figure F.11 Long-Term Care

220

(1)

Figure F.12 Property/Casualty Insurance

221

(1)

Figure F.13 Defined Benefit Pension

222

(1)

Figure F.14 Dependent Planning---College Expenses

223

(1)

Figure F.15 Irrevocable Trust

224

(3)

Index

227

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Fee-Only Financial Planning : How to Make It Work for You

Summary

Author Biography

Table of Contents

Supplemental Materials