The planning must also be cost-effective for the client. The next consideration in qualifying a client is one that all planners wish were not an issue. However, considering our litigious society, before accepting a retirement planning engagement, prudent planners should make a subjective evaluation of the risk that a prospective client may later assert some claim of planner misconduct or malpractice. Discussing professional fees is another important step in qualifying clients. We recommend discussing fees during the initial interview even if the fee estimate is only a ballpark number subject to adjustment.
Fees are generally a function of the time required to complete the engagement.
Accordingly, the general time frame for the engagement should also be discussed along with the professional fees. The planner cannot develop an accurate estimate of the proposed fee without having a clear understanding of the scope of the engagement. Therefore, the scope of the engagement should be discussed with the client, and it should be clearly communicated in the engagement letter. These documents are an effective way to communicate and record the understanding with the client about the services to be performed. Thus, their agreement with clients need make no special mention of financial statements.