My independence as a financial planner levels the playing field for you. With only my clients paying me, no recommendation creates a financial incentive. I can help select the best options for you, regardless of the company offering the right solution.
Watch Out For
"No Experience Necessary"
Many people use the title “financial adviser”. Some stockbrokers executing trades all day use it. Insurance agents may use the title because “insurance salesman” sends many people running. And some comprehensive financial planners use the term as well. (Nail technicians require more training than someone using the term “financial advisor”. Ouch.)
For each job, the amount and type of training required varies a great deal. So “financial adviser” indicates nothing about an adviser’s level of experience or knowledge.
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The Certified Financial Planner™
Financial advisers holding the CFP® designation have completed extensive training. We meet experience requirements and submit to rigorous ethical standards. It takes long hours to complete the 6 required courses. Only 50% pass the (at the time, grueling two day 10-hour) test. Approximately 10%-20% of financial advisers hold this designation. Consider choosing an adviser with the CFP® designation.
The Fixed Fee Advantage
“What am I paying and for what?” sounds like a simple question. But many people find their adviser dancing around the issue. The most common methods of compensation add many conflicts. Also, costs act like termites: you may not see them but they can still do severe damage.
How Much Difference Can This Make?
Many Certified Financial Planner professionals charge 1%+ of your asset value and use costly investments.
Over 20 years, the difference between these costs and a fixed fee can be significant! In this case a $2,000,000 portfolio would forgo $2 million more in profits. That comes from the extra $900,000 paid in fees to the median adviser charging a percentage of assets, and the loss of growth from that money.
Assuming 8% annual gross return, 1% AUM advisory fee deducted quarterly, and 0.75% mutual fund expense ratios.
III Financial using $2500/quarter fee, increasing $250/quarter every 2 years, and 0.2% fund expense ratios.