Frequently Asked Questions (FAQs)
Q: What is financial planning and what is the financial planning process?
A: Financial planning is the process of meeting your life goals through the proper management of your finances. The financial planning process, as described by the CFP®Board, consists of six steps that help you take a big- picture look at where you are financially.
- Establishing and defining the client/planner relationship
- Gathering client data, including goals
- Analyzing and evaluating your financial status
- Developing and presenting financial planning recommendations and/or alternatives
- Implementing the financial plan recommendations
- Monitoring the financial plan recommendations
Using these six steps, you can work out where you are now, what you may need in the future, and what you must do to reach your goals.
Q: How will I pay for your services?
A: Fee-based services are charged on an hourly rate, a flat rate, or on a percentage of your assets.
Commission-based services are paid by a third party from the products sold to you to carry out the financial planning recommendations.
Q: What does the CFP® certification stand for and why is it important?
A: CFP®, CERTIFIED FINANCIAL PLANNER™, and are certification marks owned in the U.S. by Certified Financial Planner Board of Standards, Inc. (CFP Board), which can help you identify financial planners who are committed to competent and ethical behavior when providing financial planning. Most people think that all financial planners are “certified,” but that is not true. Anyone can call him- or herself a financial planner. Only those who have fulfilled the certification and renewal requirements of the CFP Board can display the CFP certification marks.
The CFP Board's Code of Ethics: Through the Code of Ethics, CFP Practitioners agree to act faithfully and diligently when providing financial planning advice and services, putting your interests first. The Code of Ethics state that CFP Practitioners are to act with integrity, offering professional services that are objective and based on client needs.
Q: What does the CLU and ChFC designations stand for and what do they mean?
A: Chartered Life Underwriter (CLU) is one who has passed the rigorous qualifications required to sell and service life insurance products. Chartered Financial Consultant (ChFC) is one who has completed classes in economics, taxes, insurance, and investing.
Q: What would happen to my account in the unlikely case of fraud or institutional failure at Swift Financial Services, Inc., or at the broker/dealer, Commonwealth Financial Network®? Will my assets remain safe?
A: Your assets are carried by National Financial Services LLC (NFS), Member NYSE/SIPC, not Swift Financial Services, Inc., or our broker/dealer, Commonwealth Financial Network. NFS is one of the largest clearing firms in the country and serves as the custodian of approximately $1.3 trillion of investor assets.
As the clearing firm, NFS processes all transactions in your account and ensures the security of all contributions and distributions.
NFS itself has two layers of investor protection:
- Securities in accounts carried by NFS are protected in accordance with the Securities Investor Protection Corporation (SIPC) up to $500,000 (including cash claims up to $100,000). For more details, please visit www.sipc.org.
To supplement its SIPC coverage, NFS has arranged for additional protection for cash and covered securities from Lloyd's of London, which currently has an A (Excellent) rating from ratings firm A.M. Best and A+ (Strong) ratings with "Stable Outlook" from Fitch Ratings and Standard & Poor's. This additional protection covers up to an aggregate loss limit of $1 billion for all customer claims, of which $1.9 million may cover cash awaiting reinvestment at the individual account level. This is the highest level of excess SIPC coverage currently available. For more information on Lloyd's of London, please go to www.lloyds.com.
Neither coverage protects against a decline in the market value of securities, nor does either coverage extend to certain securities that are considered ineligible for coverage.
Commonwealth has institutional fidelity bond coverage for any losses that you incur as a result of fraudulent acts by Swift Financial Services, Inc., or Commonwealth's executives or other employees. This policy also covers account shortfalls that may arise from lost securities certificates. The per-incident limit for coverage is $5 million, with a $10 million aggregate.
We take protecting your hard-earned money seriously. Rest assured, you can have complete confidence in these redundant safeguards.