Personal Finance

Working With a Financial Adviser: How to Show Up Prepared

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Last updated on January 27, 2021 Comments: 10

This is a guest article by RJ Weiss, one of the youngest Certified Financial Planners at the age of 26 and the founder of the blog Gen Y Wealth. You can download his free Financial Freedom Blueprint to create your own financial plan. RJ Weiss is contributing to Consumerism Commentary’s series on finding and working with the right financial adviser or planner with this article about being prepared for your first working meeting.

You’ve hired a Certified Financial Planner, and you’re days away from the first meeting. It’s a very exciting time, as you imagine your bright financial future.

The first step to ensure that your initial meeting goes well is to gather the information you’ll need to form the basis of your discussions. In order to make a comprehensive financial plan, a financial planner must know where you’ve been, where you are, and where you want to go. Once your planner has this information, they can start to design a plan that gives you the best chance of reaching your goals.

The purpose of this article is to walk you through the information-gathering process for your first meeting with a CFP. Most financial planners will ask you for these documents either before or during your first meeting, but in my experience, it’s always better if a client shows up prepared.

The following are the eight things you need to have with you to be prepared for a meeting with your financial planner.

  1. Net worth statement with recent account statements. A net worth statement is easy to make, and helpful to have. A simple excel spreadsheet sorted by assets and liabilities, is all you need. Consumerism Commentary offers a good net worth template for Excel that can get you started in the right direction.Along with your net worth statement, bring the most recent statements that match each account listed. Include your bank accounts investment accounts, including retirement accounts such as IRAs and 401(k)s, so you planner can review your entire asset allocation.
  2. Statement of cash flows. A doctor can’t do their job without knowing your health history. Likewise, a financial planner can’t do their job, unless they know your monthly income and expenses. In other words, you need to prepare a budget.The more detailed your budget the better. At a minimum, break out your expenses between fixed (mortgage, utilities, insurance, car, food, etc…) and flexible (travel, eating out, subscriptions, etc…) from the last three months. Again, Consumerism Commentary has designed an income and expense report template that should do the job.
  3. List of 401(k) investment options sorted by expense ratio. If you want to save your planner a lot of time, bring a list of your 401(k) investment options, sorted by expense ratio. You may need to look at the prospectuses for each of the funds offered in order to find the expense ratio, and if you have annuities-based funds, that information might be difficult to find.
  4. Social Security statements. Bring the Social Security statement that you receive once a year and file away. If you can’t find your most recent copy, you can get an estimate online.
  5. Your goals, including projected retirement age. Knowing when you’d like to retire is a tremendous help to your planner. One of the basic calculations your planner will help you out with is to see if you’re saving enough for retirement.Besides a retirement date, write down your other financial goals. Are you looking to save for college for a child or grandchild? Are you looking to travel more? What about buying or selling your house? A good financial planner will take you through this process during your meeting, but the idea here is to put some thought into it beforehand, so you know what you really want.. Life often goes in an unplanned direction, but being as clear as possible with your goals is the only way planners can begin to design a plan that meets your needs.
  6. Tax returns and paycheck stubs. On more than one occasion, I have seen someone with high-interest debt, giving a free loan to the Government. One adjustment to their W-4, and all of a sudden, this person can now start paying off their debt. This is just one good example of why you should bring your recent tax return and paycheck stubs. Also, many people don’t really have a good understanding of how much income they earn. In my experience, when you ask how much they earn, they tend to round up, making precise planning difficult.
  7. Insurance information. As a Certified Financial Planner with an insurance background, I know firsthand that no one likes paying for insurance. Reviewing insurance documents may not sound as exciting as planning for an early retirement, but it’s just as important.The ironic thing about insurance planning (because nobody likes to pay for it) is that people are often over-insured. As a result, there is a good chance a client can save a tremendous amount of money by reviewing their insurance. For example, someone who hasn’t been to the doctor in a few years but still pays for a health insurance plan with a low deductible could benefit financially from changing his coverage options. Or, someone might pay $200 a year to insure her computer, but won’t spend that much for a term-life insurance policy.
  8. Benefits package. If your employer offers benefits such as health, life, dental, disability, dental, or vision insurance, bring coverage information pertaining to each plan. You probably received a packet at open enrollment with all of this information. Also bring the rest of your benefit information such as 401(k), pension, FSA, employee stock option plan, profit sharing, tuition reimbursement, child care, and any other benefits offered by your employer.

I applaud you for working with a Certified Financial Planner. The steps above may sound tedious, but it’s for your benefit. A client who shows up prepared shaves off hours off of the total time it takes to put together a comprehensive financial plan. If you’re working with a fee-only planner, that results in immediate savings to you.

Best of luck.

Article comments

Anonymous says:

Great advice to people – as I worked in finance for 12 years, it is hard to get people to share this information, yet make them understand that I can’t help them if they don’t!

Anonymous says:

Great article. I think we need to get a Financial planner to help us to know what to do to get better prepared for retirement. Both my husband and I would like to retire early and do the things we never got the chance to do. The month long cruise, travel in an RV, a little work to keep from getting boring. All of that stuff, especially since we just paid off the house and after a year of doing some other things we need to plow that money into retirement. So, these articles have really helped us.

Anonymous says:

Great to hear Cejay. They’re are many good planner’s out there. And if you follow Flexo’s recommendations, I’m sure you’ll find a great one. Good luck!

Anonymous says:

When do most people start looking for a financial planner?

Anonymous says:

In my opinion, most people start looking for a financial planner too late. So it’s probably not great to follow the crowd in this instance.

If you have some financial questions, maybe it’s worth paying for a hour or two of a CFP’s time. This way, your questions don’t become costly problems.

Anonymous says:

I’d be thrilled if a client came in with all of this prepared. But for the most part, many people hire planners to help them prepare this stuff and then give advice. That costs them more since the planner is spending more time organizing and compiling relatively simple stuff, but I guess it at least gets the job done that otherwise might not happen.

Anonymous says:

This is a great list of things to have together even if you aren’t going to a planner. Great advice!

Anonymous says:

i agree! this may be the best post in this series to this point. a great checklist of sorts that can get one organized…be it for this purpose or another need.

Anonymous says:

Great list on how to prepare but I would add one more item. An estate plan: It’s true that most of the information in the estate plan is covered by everything else you’ve gather but it would be great to bring your estate plan outline with you so your planner knows who all he should be concerned about.
Additionally, I’m not sure what you mean by “insurance background” but insurance products are a big part of the CFP educational curriculum. So even if the planner hasn’t worked insurance you can ask if he paid attention in class 😉

Anonymous says:

My experience in insurance, qualified for the three years of experience you need to become CFP.

Also, great observation on the estate plan. Personally, I work with younger clients, so this isn’t as big of topic as someone in their 40’s and 50’s.