Most CPAs involved in financial planning spend a good deal of time asking their client questions. Quite often they are included in a questionnaire that the client fills out. Part of the purpose is fact gathering, determining the current wealth of the client, the age of the children, etc. The CPA usually follows-up with a one-on-one session posing a couple of more questions.
This beginning step in the financial planning process requires great care. Failure to ask the right question can mean a critical piece of information is left out, which might adversely impact on the CPA/financial planner's recommendations.
If it is a retirement planning engagement, the client should be asked about medical insurance coverage. Is the client still going to be covered by a corporate plan after retirement? And if covered are there any caps on the coverage? For example, some corporations pay 80 percent of the annual premiums, but with a cap of $5,000 per year.
What about a couple in their 50s that comes in for a comprehensive financial planning engagement? Are their parents still alive? If so, and if need be, how will the long term care expenses of the parents be handled? Do they have insurance in place? Are there any siblings who may pay the expenses? Or perhaps the couple may not have any siblings and they will be solely responsible.
Another important question involves risk management. If the couple have a business, say two restaurants, you'll need to know how the restaurants and underlying properties are owned. One of the factors that must be considered in your planning is protection of the couple's assets in such a situation. For example, if one restaurant goes under, will creditors have access to the other restaurant and the underling properties because they are all owned by one entity?
I should caution that no matter how careful you are, you might fail to ask something. That's a given. So when you do present the financial plan, make sure the client knows exactly what key assumptions you have made. Any questions?
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