1.  What do the letters "CFP" mean?
2.  What is an engagement letter?
3.  What is the difference between financial advice and financial planning?
4.  How are you compensated?
5.  How many clients do you service?
6.  What is a personal CFO?
7. What is Financial DNA?


1. What do the letters "CFP" mean?

The letters "CFP" stand for Certified Financial Planner. The CFP designation identifies individuals who are dedicated to the highest level of professionalism in providing financial planning advice. The CFP credential assures that the planner adheres to internationally recognized professional standards of competence and ethical practice as set in Canada by the not-for-profit Financial Planners Standards Council (FPSC). CFP standards include requirements in education, examination, experience and ethics - commonly known as the 4Es of professionalism.

 

2. What is an engagement letter?

The engagement letter is the contract between the client and the financial planner. As such, it is the defining document setting out the responsibilities and obligations of each of the respective parties. In setting out the terms of the engagement, as a minimum, the CFP professional should include:

• Assurance of protection of client confidentiality;
• A statement that any assumptions used in the engagement will be reasonable for the circumstance;
• The specific parties to the engagement;
• The specific financial planning services to be provided;
• The tenure and timeframes for the engagement, which may include subsequent reviews;
• The CFP professional's compensation arrangements with respect to the engagement; and
• Existing conflicts of interest and agreement to disclose conflicts of interest if or when they occur.
• The potential need to use other professionals during the engagement;
• Provisions for termination of the engagement; and
• Specific limitations on the use of client information.

In the first year, we complete a letter of engagement with all clients. Depending upon assets under administration and services required, there may not be any charges for future years.
 

3. What is the difference between financial advice and financial planning?

Financial advice tends to be modular in it's origin, for example your accountant might offer tax tips; your lawyer may suggest estate planning tips; your broker might recommend a new type of investment. Solutions generally are product driven.

Financial planning tends to be more holistic in it's origin. The planning process begins with identifying your unique goals and circumstances.  Once this step is complete, we are able to provide integrated advice (advice that takes into account the implications that recommendations have on each area of your finances). Processes drive integrated solutions, with the ultimate goal of capturing as many opportunities as possible, while at the same time, minimizing mistakes!

 

4. How are you compensated?

Each relationship begins with a letter of engagement. This fee for service arrangement is based upon the financial planning services provided, over and above asset management. Most often this financial compensation lasts only for the first year.

We also receive compensation from managing assets for our clients. The fees for this service are determined based upon assets under administration, with the compensation percentage decreasing as assets under administration reach certain thresholds.

All compensation is fully disclosed during our Discovery Meeting and again upon completion of the letter of engagement.

 

5. How many clients do you service?

Frank Danielson and Ray Glicksohn co-service all client relationships, with each partner specializing in their areas of expertise. We found co-servicing client relationships optimized our communication options and provided the highest level of client satisfaction. We believe the maximum number of clients to whom we can provide our "Comprehensive Personal CFO Service Offering" is 60 families. We currently provide this level of service to 40 families.


6. What is a Personal CFO?
Wealthy individuals and families have unique financial and investment needs.  Because of their significant assets, they are potentially vulnerable to advisors with conflicting goals.  An advisor who is giving financial planning advice and selling financial products has an inherent conflict of interest, especially if the advisor’s or financial institutions compensation depends more upon the sale of a product than the value of the advice given. 

A personal “Chief Financial Officer” or CFO is someone who can provide objectivity and help ensure you’re receiving expertise and guidance void of any conflicts of interest.  A personal CFO is aligned with their client’s interests and isn’t motivated by commissions or incentives derived from the sale or products or services.

Most people are familiar with the functions performed by a corporate CFO.  Similarly, a personal CFO provides constant management and integration of your financial affairs and wealth strategies. A personal CFO takes a very active role to help ensure that agreed-upon planning strategies are implemented in a timely and effective manner.

Often times, wealthy individuals have a number of professionals such as an accountant, tax advisor, broker, banker, insurance agent, money manager and lawyer. The personal CFO’s role is to act as the quarterback of this financial team, coordinating all the professionals in an objective, and professional manner.  He or she will also review and analyze recommendations from other advisors on financial strategies or investment products being proposed.  The ultimate result is achieving the client’s goals and objectives, as well as potential cost savings.

When necessary, the personal CFO can also act as the “bad guy” deflecting investment tips sent to a client by his nephew, his broker or a college buddy who has a “can’t miss” opportunity. 

The ideal personal CFO would be from a fee-based financial counselling firm, which derives its revenues from disclosed fees and not from commissions.  The firm should have breadth and depth of professionals and other credentialed individuals bringing a diversity of experience.  This experience should extend across multiple disciplines such as income tax planning and preparation, estate administration, business succession and cash flow planning as well as asset allocation and risk analysis.

Fees for these services are not inexpensive. However, the collective cost savings of the independent and objective advice—and the peace of mind it brings—can be significant.


7. What is Financial DNA?
Financial DNA Resources is a leading international financial behavior consulting firm which offers unique wealth mentoring, coaching, education, facilitation and business consulting services to corporations and individuals in over 10 countries. All of these programs draw on very powerful human behavioral insights obtained from their proprietary Financial DNA profiling systems. Their programs are internationally recognized for humanizing people's relationship with money and finding meaning in their life.