At ACP, we took the opinion that if we all put our best ideas into the “pot”, the sum total would be a process and practice much more advanced than any of our peers.
Selecting an Advisor
If you have found our website, you likely came here from a link from the National Association of Professional Financial Advisors (NAPFA) or a friend referred you to us. In any event, our hope is that you find this website helpful.
We are a Fee-Only™, comprehensive tax and financial planning firm with over 20 years of experience. We are proud to be long time members of two of the oldest associations that have been largely responsible for the reduction/elimination of commission for clients and the concept of true comprehensive wealth management. Our clients have benefitted from our relationship over the last 20 years with both NAPFA and the Alliance of Comprehensive Planners (ACP) members.
There are 5 key areas we believe you should be looking at when you look for an advisor. Depending upon what you are looking for you may need all of these:
- NAPFA member
- ACP member
Let’s break this down as to why all of these are important and how you can determine what type of advisor is best for you.
Fee-Only™, not to be confused with Fee-Based, Fee-Offset etc., planning is for people who want guidance, while not being concerned that the person they are talking with is selling them a product. Fee-Only™ has been around 25+ years and has become the standard for the best financial advising firms. For these firms, their goal is to build successful client relationships.
Fee-Only™ means the advisor explains your fees up front, and what services you will receive for that investment. It has no hidden money going to the advisor or his firm. Your advisor works only for you!
NAPFA (National Association of Professional Financial Advisors) started back in 1983 when a group of advisors had this great idea that instead of trying to sell products, they should help people and have as few conflicts of interest as possible.
NAPFA advisors have at least a CFP certification or more (Finance/Economics degrees, etc.). They aren’t allowed to hold any licenses to sell any product. Put another way, they can’t sell you anything. They are all RIA (Registered Investment Advisors) and all adhere to a fiduciary oath.
Why is being a NAPFA member important?
Two main reasons:
- Community. The financial planning space is constantly changing, new tax laws, new planning vehicles, etc. If you want to always be on the cutting edge, learning from a group of planners with the same integrity and strong desire to help others, NAPFA membership will keep you at the forefront of the industry. There are over 3,000 members and sub-members in NAPFA now. This is a deep bench of advisors that are regularly willing to share with other advisors about the unique situations a client may be having and how they came up with a solution.
- Membership drives consumer education. NAPFA has its own non-profit, consumer focused education program. This is geared to helping consumers become educated about finances and the types fo advisors that have pledged an oath to serving the consumer. This focus had been heavily responsible for driving down costs to all investors. Supporting NAPFA is supporting the ideals that we should help each other, not try to figure out how we can “get one over someone”.
At less than $1,000 dollars a year, this membership is a must for any Fee-Only™ advisor.
“The most selective credential is membership in NAPFA” – Newsweek
This is the only association that, from day one, believed they could add value to clients by integrating tax planning into the financial planning process. Many advisors have feared taking this role on. Unfortunately, they may be leaving thousands of tax dollars in the IRS’s hands, instead of putting them to work for their client.
ACP, Alliance of Comprehensive Planners, was started almost 25 years ago. Where NAPFA has focused on educating the public on Fee-Only™, ACP started as a “way of planning”. Originally founded by Bert Whitehead, a tax attorney turned wealth manager, advisors started asking to be taught his approach to planning. Over the last 25 years, this approach has grown into a very refined process (which you can see under Financial Planning and Wealth Management).
ACP planners, by and large, believe that preparing the taxes for their clients gives their clients the best chance of saving the maximum amount of dollars towards their retirement. Planners, after they have achieved their CFP or better, go through a week of intensive training on their time-tested process, the life cycles of clients, and how to “find” money in tax returns and other locations.
Every year planners from all over the country get together to share their best ideas, update each other on new tax planner strategies and financial planning techniques.
Who this matters to: Those looking for a long-term engagement AND want tax planning.
The amount of experience you need is related to your stage in life and your complexity. For a young college graduate you may only need an advisor with 3-5 years of experience. However, if you have a large portfolio, we highly recommend an advisor that has managed assets at least back to 2005, but further is preferred. Their ability to plan for 2008 and still be an advisor, says something for how they communicate with their client. To be clear, this is not because of how well they managed client assets, as we legally can’t talk about this publicly. Managing client expectations is as, if not more important, than managing the portfolio. Why? There are multiple studies that show investors that exit markets when they are down, UNDER perform those that stick through bad markets.
Experience to ride through the rough seas is imperative for those with larger portfolios.
The CFP has done a great job in developing a baseline program for those people that didn’t go to college for financial planning. However, many of the CFP programs do not go into as much depth in economics and mathematics as a degree in finance, but if your situation is not that complex, that likely won’t matter and the CFP certification should be sufficient.
If, however, your situation is more complex, and you are looking for problem solving, it may make sense to look at advisors with degrees in accounting, finance, and/or economics. Advanced degrees can be a plus because often the education they get is “how to think” out-of-the-box and how to solve complex problems. The math, accounting, and economics classes are often more advanced, which makes it harder to earn these degrees.