Frequently Asked Questions
Most financial planners are investment advisers, but not all investment advisers are financial planners. As a registered investment adviser that offers financial planning services, Cali Pearl is able to assess every aspect of your financial life—including saving, investments, insurance, taxes, retirement, and estate planning—and help you develop a detailed strategy or financial plan for meeting all your financial goals.
Others call themselves financial planners, but they may only be able to recommend that you invest in a narrow range of products, and sometimes products that aren’t securities.
Before you hire any financial professional, you should know exactly what services you need, what services the professional can deliver, any limitations on what they can recommend, what services you’re paying for, how much those services cost, and how the adviser or planner gets paid.
- What experience do you have, especially with people in my circumstances?
- Where did you go to school? What is your recent employment history?
- What licenses do you hold? Are you registered with the SEC, a state, or the Financial Industry Regulatory Authority (FINRA)?
- What products and services do you offer?
- Can you only recommend a limited number of products or services to me? If so, why?
- How are you paid for your services? What is your usual hourly rate, flat fee, or commission?
- Have you ever been disciplined by any government regulator for unethical or improper conduct or been sued by a client who was not happy with the work you did?
- For registered investment advisers, will you send me a copy of both parts of your Form ADV?
Be sure to meet potential advisers “face to face” to make sure you get along. And remember: there are many types of individuals who can help you develop a personal financial plan and manage your hard–earned money. The most important thing is that you know your financial goals, have a plan in place, and check out the professional you chose with your securities regulator .
- Consultation with prospective clients provided for up to 1 hour at no charge
- Comprehensive financial plans – $2,000 minimum that increases due to plan complexity
- Hourly fee for financial planning services – $250/hour with a 2 hour minimum engagement
Either party may terminate the Initial Service Agreement within five (5) days of signing the agreement. Client shall be responsible for the payment of only those fees covering services already rendered by the Adviser at the time of termination.
Fees paid to the Cali Pearl Corporation for financial planning and advisory services are completely separate from the fees and expenses charged by mutual fund companies and their portfolio managers. A complete explanation of these fees and expenses are provided in each mutual fund prospectus. Clients are encouraged to read the prospectus before investing.
Sheryl Garrett wrote an article for an online publication that provides an excellent explanation of financial adviser compensation. So instead of reinventing the wheel, Sheryl Garrett’s explanation for financial adviser compensation is below.
All people in the financial services industry, which include financial planners and advisers, get paid in one of the following four ways:
- Commission only: Some advisers receive only commissions for selling financial services products, such as investments, real estate, insurance products, or loans. Examples include advisers affiliated with companies like State Farm, American Family, and Edward Jones.
- Commission and fees: A commonly misunderstood term used to describe this compensation method is fee-based. Commission and fee advisers may receive a fee for developing a financial plan for you and then receive commissions when they sell you insurance and investment products recommended in your financial plan. Examples include registered representatives of companies like Ameriprise, AIG Financial Advisers, and UBS.
- Salary plus bonuses: Many discount brokerage firms and banks compensate their employees with a base salary plus incentive pay for bringing new client accounts into the institution. They may receive substantially higher bonuses by recommending or selling certain products and services over other options.
- Fee-only: Fee-only financial advisers provide advice or ongoing management for a fixed fee. They’re typically Registered Investment Advisers (RIA) or employees of this type of firm. One benefit of hiring fee-only financial advisers is that they have no financial stake in the recommendations they give you. They recommend only what they believe is in your best interest.
Fee-only financial advisers charge in three ways:
- Hourly fee: You pay for all the time that the financial adviser works on your case or spends with you. Multiply the time spent by the adviser’s hourly charge, and that’s how much your fee is. Always find out the expected cost and the maximum cost before you begin working with an adviser who charges by the hour. Hourly-based pricing is best for:
° People who need specific advice about one or a few financial topics.
° Do-it-yourselfers who just want a professional’s opinion.
° People who want to do as much as possible to save money but want expert analysis and direction.
- Flat fee: Some financial advisers offer flat fees for a package of services. Flat-fee pricing is best for people who need specific advice or services and are willing to take the gamble that the flat-fee arrangement will cost no more than it would have if they paid by the hour.
Retainer fee: A retainer fee is often calculated based on a percentage of some sort, such as one percent (1%) of the assets the adviser manages for you, or some percentage of your net worth or income, or mixture of the two. Retainer fees are also computed by estimating the amount of time required to provide the services promised based on the complexity of the case and the skills required of the adviser, for the time covered under agreement to retain the adviser. A retainer fee is best for people who need, want, or can afford to transfer the responsibility of managing their personal financial affairs to a financial adviser .
Cali Pearl is a registered investment adviser and firm information can be found on the website: adviserinfo.sec.gov. Investment advisers file Form ADV to register with the SEC and/or the states. Form ADV contains information about the investment adviser and its business operations. Additionally, it contains disclosure about certain disciplinary events involving the adviser and its key personnel.
You can also search for an individual investment adviser representative and view that individual’s professional background and conduct, including current registrations, employment history, and disclosures about certain disciplinary events involving the individual. The information about investment adviser representatives that appears on this website is collected from individual investment adviser representatives, investment adviser firm(s), and/or securities regulator(s) as part of the securities industry’s registration and licensing process.
BrokerCheck is a free tool to help investors research the professional backgrounds of current and former FINRA-registered brokerage firms and brokers only .
Brokers, meanwhile, are regulated by the National Association of Securities Dealers, which imposes a “suitability standard” rather than the stricter fiduciary standard. This simply means an investment sold by a broker must be suitable for the client.
A “broker/dealer representative” is a salesman of stocks, bonds and mutual funds. Many times they are also involved with the sale of insurance and annuity products (all for commissions). “Insurance agents” represent the interests of one or more insurance companies and only get paid when they sell a policy.
Neither the broker/dealer representative nor the insurance salesman gets paid to provide advice. These individuals only get paid when they sell a product.
Fee-only Registered Investment Advisors do not sell products. They work for their clients and are only compensated by their clients in exchange for professional advice. Thus, a fee-only planner’s compensation encourages objective advice and behavior that is always in the client’s best interest .