We reported last week in this Blog how Americans are focused on improving their own personal finances in 2024, and we applaud their efforts. Now comes the difficult follow-through. With resolutions, whether formal or casual, time is the enemy of conviction. The time to start is now. The time to relax is, well, never. Change is not an event; it is a process.
Many people resolve to develop a relationship with a financial advisor/investment manager. Choosing the right advisor has never been easier. Before making any calls, a prospective client should understand some fundamental terminology. Fiduciary is a good start. Use of the term requires the planner to place the interests of the client ahead of his or her own. In other words, both parties are on the same side of the relationship, sharing goals.
Fee-only refers to the method of compensation received by the planner, and in this case, means no commissions will be received, thus avoiding inherent or potential conflicts of interest. Don’t confuse fee-only with fee-based, as they can be totally different..
Certified Financial Planner® (or CFP®) is the highest professional designation available among the many qualifications used by people in the financial planning arena.
Registered Investment Advisor (or RIA) is a form of doing business enveloping all these concepts. It is among the fastest growing business models in society, serving hundreds of thousands of Americans. RIAs are regulated by the U.S. Securities and Exchange Commission (SEC), or State Securities Regulators for smaller RIAs (under $100 Million in assets under management). Many investors prefer the personal touch provided by small boutique firms, whereas others prefer to be part of mega-companies.
Finding a potential planner to fit your needs is made easier by a few websites. Letsmakeaplan.org is the website operated by the CFP® Board, which is the organization that administers the CFP® designation. The tab Find a CFP® Professional will identify qualified individuals and companies in your area. NAPFA.org leads to the website and corresponding search for members of the National Association of Personal Financial Advisors. Membership is open only to fee-only, fiduciary financial planners, guaranteeing a prospective client will be served by competent, unbiased professionals. Avoiding expensive mistakes is now easier than ever.
We wish everyone a safe, happy, and prosperous New Year. 2024 is slated to be a year of change. Hopefully, for the better. Hopefully, we can help.
Van Wie Financial is fee-only. For a reason.
