CHOOSING A FINANCIAL PLANNER

What to Look For When Choosing a Financial Planner:

When you select a financial advisor, 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 advisor is compensated.

All NAPFA-Registered Financial Advisors are highly qualified. They have demonstrated their ability to provide sophisticated, comprehensive financial planning services. Specific requirements include:

§  Fee –Only compensation with all clients

§  Advanced broad-based financial planning education

§  Significant professional experience

§  Peer review of a comprehensive plan

§  Compliance with Registered Investment Advisor regulations

§  Extensive continuing education requirements

Why Select A Fee –Only Comprehensive Financial Advisor?

The greater the advisor’s 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. The National Association of Personal financial Advisors (NAPFA) believes there is a significant conflict of interest if an advisor stands to gain financially from any recommendations you may follow.

Examples of conflicts of interest between a planner and a client include:

§  Commissioned-based individuals working for broker/dealers and insurance agencies.

§  Planners compensated by commissions on products that they recommend or sell.

§  Fee-Based or Fee-Offset arrangements that allow a planner to earn both fees and commissions.

Fee-Only planners are compensated solely from fees paid by their clients and do not accept commissions or compensations from other sources. NAPFA members are independent and have their own methods of determining fees, including:

§  Flat fee or retainer

§  An hourly fee

§  A percentage of assets under management (AUM)

§  A percentage of income

§  A project fee 

Which Method Is a Better Value?

Consider the price you are willing to pay for a little peace of mind. Fee-Only advisors have access to thousands of no-load and low-load products as well as many discounted services. They are not limited to company-sponsored offerings and sales-driven opportunities.

The result us an unbiased financial plan created by professionals who are committed to acting as a fiduciary in a client-centered relationship. Clients of Fee-Only advisors recognize that the fees they pay are a real value when the overall benefits of comprehensive planning are considered.