This is for informational purposes only
Working with a Fee-Only Adviser
How to Choose A Financial Planner Tough Questions To Ask ... PDF LINK
You don’t need to be a millionaire to benefit from comprehensive financial planning. Whether you have thousands or millions of dollars to invest, you are entitled to help from a financial advisor who has met the highest standards of education, training and competency. Ordinary people like your neighbors, family and friends have turned to professionals for help.
To benefit from working with a financial advisor all you need is a willingness to share information like your short and long-term goals.
Simply talking with an advisor may help you identify a broad range of financial and personal priorities. In turbulent times, or times of prosperity, you’ll benefit from comprehensive financial planning intended to help you maximize the assets you have.
It may be that you’d like to establish a budget that will help you put away money for future needs like retirement or paying for a child’s education. Men and women, married couples and single individuals, some younger, others older now recognize the benefits of taking a comprehensive approach to financial planning.
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What Is Comprehensive Financial Planning?
The old adage “for every action, there is a reaction” is particularly true when mapping a course of action to reach your financial goals. If you focus on only one or two elements, other areas you overlooked could undo all of your efforts. Comprehensive planning recognizes the need to consider all areas of your financial situation before developing a plan to reach your personal financial goals.
What Should You Expect From A Comprehensive Financial Adviser?
After taking a close look at your existing circumstances a trained professional will help you identify your goals - sometimes referred as your objectives. The adviser will create a plan that considers all the financial aspects of your unique situation. Additionally you’ll also be provided with as much assistance as you need in the implementation of the recommendations.
Your financial situation is always changing in reaction to outside influences. It’s also important for an adviser to periodically review and revise your plan to adjust to changes in the financial world as well as your personal goals.
What To Look For When Choosing A Financial Planner:
When you select a financial adviser, there are a number of factors you must take into account – expertise, experience, integrity and even personal compatibility. If you are looking for objective advice you can’t ignore the question of how the Fee-Only all of the adviser is compensated. All NAPFA-Registered Financial Advisers and Provisional Members* are highly qualified.
NAPFA-Registered Financial Advisers must have at least three years of comprehensive financial planning experience. Provisional Members may have less.
Why Select A Fee-Only Comprehensive Financial Adviser?
The greater the adviser dependence on commission income, the greater the conflict. In the end, that conflict can cost you, both in out-of-pocket expenses and in the quality of advice you receive.
At the National Association of Personal Financial Advisers (NAPFA) we believe there is a significant conflict of interest if an adviser stands to gain financially from any recommendations you may follow.
What Can’t An Adviser Do?
Predict the future.
Guess what you are thinking.
Guarantee the performance of investments.
Protect you from destructive financial habits that you do not address yourself.
Go beyond the role of adviser into the role of a therapist.
Magically get you as much money as you would like to have.
Earn higher than average returns year after year.
Your Responsibilities As A Client:
Provide the background information necessary for an adviser to make informed judgments and recommendations.
Be ready to consider new information.
Ask for clarification when you don’t understand something.
Be forthcoming about your personal values, including goals, concerns and preferences.
Founded in 1983, the National Association of Personal Financial Advisers is the nation’s leading organization of Fee-Only comprehensive financial planners. NAPFA fights for the public’s right to receive unbiased assistance in making important financial decisions. Members of NAPFA believe consumers need to be protected because many significant conflicts of interest exist when financial planners act as both an adviser and as a salesperson who earns commissions from recommended products.
NAPFA’s standards require members to have the advanced education, knowledge and experience required to practice comprehensive financial planning. When looking for a financial professional, just ask, “Are you a member of NAPFA?”
If the answer is yes, you know you’ve found a highly trained, Fee-Only comprehensive financial advisor. Join the thousands of people every year who come to NAPFA for a trusted advisor.
What Other People Are Saying About NAPFA
“The most selective credential is membership in the National Association of Personal Financial Advisers, whose 750 members have agreed not to take commissions on the investments they recommend. This avoids conflicts of interest: too many planners make their money by suggesting only investments that reward them for their recommendations. NAPFA members charge fees—some by the hour, some by the year—for broad and comprehensive advice on taxes, insurance, retirement and asset management. Their plans are subject to peer review by other NAPFA members." April 1, 2002 Newsweek\
“If you have more than $50,000 to invest, you should fire your broker and find an investment adviser. Brokerage firms would like you to think they perform the same functions as investments advisers.” “Financial planners who are members of the National Association of Personal Financial Advisers…submit their work to peer review and are not supposed to charge anything but a fee” Arthur Levitt – Former SEC Chairman
“Financial Planners who take commissions have a built-in conflict of interest...even with disclosure, my choice would be a Fee-Only planner. Newsweek - Jane Bryant Quinn
“Start with the general practitioner...a Financial Planner (whose) compensation should be from fees alone.” Money Magazine
“The most important matter is how the planner is compensated. Hire the planner who...has no financial stake in (your) investments.” Forbes
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How to Choose A Financial Planner Tough Questions To Ask ...
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