Who's Got Your Back

There seems to be quite a bit of confusion among investors when it comes to selecting a professional financial adviser.  I am a full-time fiduciary fee-only professional Certified Financial Planner™ practitioner (a CFP®.)  That’s my full job description.  It is no wonder so many people are either confused or have their heads in the sand on this issue when it comes to selecting someone to help them plan for the future.   Let me break down the components of that for you.

A full-time fiduciary is, by law, required to place the interest of the client ahead of everything else.  They have a duty to make decisions that are best for the client while minimizing any conflicts of interest and disclosing those few conflicts that may exist.  A fiduciary’s loyalty is to the client first – not to the advisor or the advisor’s firm as is the case with most salesmen.  They should be a fiduciary full-time, not just part of the time.  They should not be a part-time fiduciary to create a plan and then change hats and become a salesman selling a high-cost product that is not in the client’s best interest. 

A fee-only professional is compensated only by a fee paid directly by the client for the advice and planning provided.  The fee should be transparent and clients should receive an invoice so that they are aware of and understand the total amount of compensation being received.  Fee-only professionals are not compensated by any commissions, sales charges, sales contests, bonuses, or other compensation paid for the sale of any specific investment or insurance product.  They are not paid any referral fees from other service providers.  Their compensation is not dependent upon any product that the client might buy and they don’t earn more or less income from any particular investment or insurance product used.

A professional Certified Financial Planner™ practitioner (a CFP®) must meet a minimum standard of education and experience to become certified as well as meet ongoing ethics and continuing education requirements to remain certified.  This is the minimum level of commitment your advisor should attain to show their adherence to professional standards.  Don’t be fooled by a confusing array of other “certifications” or “designations.” The CFP® certification has become the gold standard with more than 75,000 individuals having earned this minimum standard.  It is an assurance that your advisor has a basic level of education and experience in personal financial planning.

I hope that this information is helpful in your search for a financial adviser.  Let us know if we can be of assistance.