Also known as: financial planners · financial planning · financial advisor · investment advisor
Written by attorneys · grounded in primary & secondary sources — see below
A person whose business is advising clients about personal finances and investments. Upon completing a certification program, such a person is called a certified financial planner.
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Fiona Foster, a Florida attorney also licensed as a CPA, placed the CFP designation on her business cards and letterhead. The state board sought to discipline her for the listing. The court held that the truthful designation constituted protected commercial speech and could not be banned without evidence of actual or inherent misleadingness.
Flagship Logistics directors retained a financial planner to value a proposed merger. The planner supplied a fairness opinion after reviewing the company's projections. Shareholders later challenged the deal. The court examined whether the board's reliance on the planner satisfied the duty to act on an informed basis.
Foster Forge's board consulted its financial planner during an auction process. The planner advised on bid comparisons and timing. A competing bidder sued, alleging inadequate process. The court assessed whether the planner's input helped the board fulfill its duty to maximize shareholder value.
Fusion Power's financial planner modeled the dilutive effect of a poison pill. The board adopted the measure after reviewing those projections. A hostile bidder challenged the tactic. The court reviewed whether the planner's analysis supported the board's reasonable response to the threat.
Fairfield Bank hired a financial planner to evaluate a hostile tender offer from Hanson Trust. The planner prepared a report on share value and strategic alternatives. The board rejected the bid. Litigation later tested whether the planner's work demonstrated a good-faith inquiry into corporate value.
Omnicare's financial planner analyzed the impact of a voting agreement on a merger with NCS. The planner warned that the lock-up could preclude higher bids. The board approved the deal anyway. The court later scrutinized whether the planner's input satisfied enhanced scrutiny of deal protections.
A certified financial planner has completed a recognized certification program and may use the CFP designation when advising clients on personal finances and investments.
Supporting sources
A lawyer may truthfully advertise the CFP credential. States may not discipline the lawyer for the listing absent evidence that the statement is actually or inherently misleading.
Directors may rely on a financial planner's analysis when making informed decisions. Courts examine whether that reliance demonstrates the board acted on an informed basis under the business judgment rule.
Supporting sources
…a market test. A secondary purpose of the October 8 meeting was to obtain the Board's approval for Trans Union to employ its investment advisor, Salomon Brothers, for the limited purpose of assisting Management in the solicitation of other offers. Neither Management nor the Board then or thereafter requested Salomon Brothers to…