Trust is the foundation upon which a genuine financial planning relationship is built. You will be revealing one of the most intimate aspects of your life: money. You must fully trust that the person calling himself or herself a financial planner is looking out first and foremost for your interests, not theirs. And the starting point for building that trust is full disclosure by the planner.

What exactly is full disclosure when it involves financial planning? How do you know you are receiving full disclosure? What should you look for?

In your initial contacts with a prospective financial planner, you’re probably focusing on many issues: how much do they charge, what services do they provide, what financial planning credentials do they have, how can they help you? But among the many key questions you should be asking is one that you may not know to ask: is the person a registered investment adviser and, if not, are they a Certfied Financial Planner® professional?

This is a key question because all registered investment advisers (RIAs) must provide full disclosure about their business practices. An individual or firm must register with either the federal Securities and Exchange Commission or their state securities agency as an RIA if they provide investment advice as part their business.

Financial planners who hold the CFP certification are also required to disclose generally the same information as a registered investment adviser. But financial advisers who work for banks, or who work as insurance agents or stockbrokers, do not have disclosure requirements, unless they are also CFP® professionals.

Now the SEC is proposing an exception to this RIA rule that consumers should be aware of. The law currently exempts stockbrokers from registering as advisers if their investment advice is “solely incidental” to their brokerage services and if they are not specifically compensated for that investment advice -- unless they have the power of attorney to buy and sell stocks in a client’s account.

The SEC is proposing that stockbrokers remain exempt even if the client is paying for the investment advice, such as through portfolio management fees. Before the SEC proposed the rule, stockbrokers calling themselves a financial planner and who provided investment advice for a fee would have need to register.

What key disclosures must an RIA make when registering, and why are those disclosures helpful to consumers? The RIA must spell out this information on either the federal Form ADV, Part II, or the same information in a customized brochure by the adviser. Any RIA should provide a copy of the form to you upon request. You also can request a copy of Part I, which reveals any disciplinary history. Part II covers numerous items, such as the RIA’s services and fees, types of clients, education background, business activities, and business affiliations that are helpful information to the public.

For example, RIAs must disclose whether they buy or sell securities that they recommend to clients (known as self-dealing), how they are compensated for their services, whether they are compensated by a third party for client referrals, or what other business arrangements they have with outside parties. Some of these or other arrangements may suggest potential conflicts of interest that might compromise the objectivity of the advice.

Not all conflicts of interest are inherently bad. The key is full disclosure of those potential conflicts, so consumers can judge for themselves whether the conflicts could potentially compromise the planner’s objectivity and undermine the trust that is so vital to an effective financial planning relationship. But unless the planner is a registered investment adviser or a CFP professional, it's difficult to find out whether such conflicts exist.

Another key feature of being an RIA is that the adviser must act as a fiduciary -- that is, the adviser must put the interests of his or her client ahead of the adviser’s own interests. "Financial planners" who are not registered as such, or who do not work in a bank or trust department, are not required by law to adhere to this high standard. RIAs also are not permitted to use client testimonials to help attract new clients.

Ultimately, the result of full disclosure is that consumers can better discern when they are receiving unbiased advice upon which they can build a deep and trusting financial planning relationship -- or merely something that looks like financial planning but isn't.

This column is produced by the Financial Planning Association, the membership organization for the financial planning community.