Follow Us:

Have Questions?
We have Answers

Click Here to send us a question
and to receive answers from our Experts

Can I Ask a Financial Planner for References?

by Chris Cooper, Financial Planning Expert
November 01, 2013

Question: I want to make sure I get the best possible candidate for planning my future. Can I ask a financial planner if I can speak to his clients about his services?

Answer: Let’s turn this question around the other way; can the planner ask you for references to see if you are a nice person, if you pay your bills on time, that you do not engage in deception to get out of paying a bill, and that you are honest and ethical in your business dealings with other professionals?

Professionals held to the fiduciary standard of care, i.e., doctors, lawyers, mental health professionals, and private fiduciaries, cannot give you names of clients as it is against the law.

If your planner is held to a fiduciary standard, such as a registered investment advisor is, then the answer is NO. The planner who is registered as investment advisor cannot give you clients names without violating the rule against “testimonials”.

Financial planners who are employed by a bank (which includes Merrill Lynch and other brokerage firms now) also cannot give client names as it is a violation of banking privacy laws.

So if you want to speak to a client of a financial planner, you need to be referred by a client of the financial planner or a professional who refers to the planner. You need to ask your friends and colleagues who they work with and what kind of relationship they have with the planner. If you are meeting this planner for the first time at a free dinner or breakfast he is sponsoring, then you know this planner is not a fiduciary, but a sales person.  If you cannot evaluate for yourself the actions the sales person is recommending, then don’t buy anything.  Only sales persons who receive commissions from expensive financial products (such as annuities) can afford to have these expensive dinner meetings.   

Generally when I hear people asking this question, what they really want to know is how much return on investment the planner’s client has received, which is, again, privileged information of that client.  So, the prospective customer is actually engaging in short term behavior jumping from planner to planner thinking he can outsmart the planner by jumping from one planner to the next chasing return. As a planner myself, I would not consider working with this kind of client.

Have a Question? Submit here.

Chris Cooper is the owner and founder of Chris Cooper & Company, Inc., a fee-only financial planning firm for elderly persons and the owner and founder of ElderCare Advocates, Inc. a private geriatric care management and long term care consulting firm. As a California Licensed Professional Fiduciary, Chris can serve as  Conservator of the Person and Estate under court appointment,  as Agent under a Durable Power of Attorney for Financial matters and Health Care matters.

See more of Chris Cooper's expert answers

Your Answers and Comments

Post your answer or comment
You must be logged in to post a comment

Previous Expert Q & A

More Previous Expert Q&A