Figuring out how to choose the “right” advisor is not as simple as selecting a CPA, whose stringent requirements are relatively straight forward. This is partly because for many years a 4 year degree was not required to become a Certified Financial Planner (CFP). Today, one must first obtain a higher education degree to become eligible for CFP certification. Interestingly, the subject matter does not matter at all – it could be a degree in History, Mathematics, or even Art. This vague set of requirements sheds some light on how disparate the education and experience can be of those in financial planning. To the CFP’s credit, they’ve started to following in the footsteps of NAPFA, and are pushing their certification to be a much higher standard than it once was. Additionally, they’ve put together a good program that gives those interested in the field of financial planning a baseline to work from.  We get our interns from the CFP program and so our current Para-Planner, Ricky, has passed the CFP test.

Incidentally, Mike’s degree is in Finance with a minor in Economics. Going into college, he knew exactly what he wanted to do with his career.

Confusion in the marketplace goes beyond designations like CFP because new terms have cropped up over in recent years such as Family Office, Wealth Manager, Financial Advisor, Financial Planner, and Investment Advisor, among others. Furthering the confusion, there are numerous places to find these professionals.

  • Captive Agents:  People typically working in the insurance industry.
  • Hybrid Advisors:  Advisors that can charge you for their time and collect commissions.
    The easiest way to spot them is looking at the bottom of their website.  It will say something like “securities offered through” on there somewhere.  This means that they can take commissions on the products/assets they manage.
  • Fee-Only:  The only true no-commission advisors.
    Those legally using the term Fee-Only proudly belong to NAPFA.
  • Fee-Based:  An unregulated term that can be used by advisors who “switch hats” between providing advice and selling products or receiving commissions.

Ok, this is all great- but this really doesn’t help me find the Best Advisor for ME.  How do I do that?  If you agree with the below concepts/ ideology, let me see if I can help:

  1. The advisor should understand there are two parts to every individual.
    There are things we can control and things we can’t.  In the space of financial planning there are items which are behavioral in nature such as wanting to sell when markets decline, or justifying increased spending because you’re working extra hours. Then there are tangible choices such as how much you can save. If you feel that you can be honest with yourself about the things you can control and the things you can’t, then we’re off to a great start in terms of compatibility.
  2. The advisor should know you well enough to see when you are making a behavioral choice that could adversely affect your long term plans.
    A detailed advisor can see ALL aspects related to your tangible choices. They prepare your taxes so they know how to save tax dollars today and far into the future. They don’t need to know every dollar spent, but they can easily estimate what it’s taking my to run a current household. They can build a portfolio that will protect from significant market corrections. They can work with insurance agents to adequately insure (and not over insure). Lastly, they can work with or even recommend an estate attorney so that assets are disbursed correctly when you die. If you find yourself nodding along here about an advisor working form the big picture, we’re even more likely to be a match for each other.
  3. It’s important that the advisor understands that life is more than just accumulating as much money as possible.
    While money enables the time that we desire with friends, family etc., Advisors see life as more than just the dollars one accumulates. They understand that each one of us has something unique driving them forward and a reason behind trying to amass wealth. This could be so they can stop working at an undesirable job, or to be prepared to help out an aging parent. If you like the idea of an advisor seeing your unique situation and build helping you build wealth as a means to your goals, then we’re ever more likely to hit it off great.

If the above resonates with you, we would love to meet you.  We are passionate about working with people that fit these 3 concepts.

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