What Should You Look For In a Financial Planning Firm, Wealth Manager and / or Financial Advisor?

Just a few items to have on your check list:

* Review the advisor’s methodology prior to committing your time, efforts and most importantly your hard earned investment dollars.
* Ask for a copy of all compensation, fee and/or commission schedules.
* Ask if they have been subject to any legal and/or disciplinary actions or have received any client complaints in the past.
* Is the financial advisor using an institution to “clear” or execute trades?  If so, become familiar with that institution and double-check the fees associated with this activity.  Know all the details first…

* Ask for their current client list of references, specifically from clients who have similar retirement goals as yours.
* Inquire about the financial advisor’s education, industry experiences, professional affiliations, credentials and general background.
* Make sure any financial planner and/or wealth advisor you are meeting with is properly licensed, bonded and insured in the states where they do business.

What is a financial advisor’s Fiduciary Duty? 

A fiduciary duty is a legal or ethical relationship of confidence or trust between two or more parties, most commonly a fiduciary or trustee and a principal or beneficiary (from Wikipedia).  Do you know what it means to you?

NOTE: Some experts recommend contacting 2-3 financial advisors or financial planning firms, so that one may compare/contrast each firm, thus making the best-qualified choice for you & your loved ones. 

Best wishes in your search. 
The AllFinancialAdvisors.com Team

Finding the right financial planner and/or financial advisor for you…

Financial Advisors and financial planning professionals all have different experiences, education, and varied specializations. 

Finding the right financial planner and/or financial advisor takes the right resource.  We hope our free online directory helps you conduct this research easier.  You can trust us as an unbiased resource.

Many of the financial planners within our directory explain how their financial planning process works within their profiles. 

Our financial advisors take fiduciary oaths and pledge to uphold the highest standard of ethics. 

Many of our advisors are members of good standing within the National Association of Personal Financial Advisors (NAPFA); which advocates a Fee-Only compensation model.  Quite a few of these featured advisors are also associated with the Financial Planning Association (FPA).

After reviewing their profile pages, one can request a meeting, introductory call and/or their fee schedule.

Experts recommend contacting several advisors to be able to make a good comparison of services.  We hope this helps. 

Thanks!

Financial Advisor Accountability and Incentives: Performance-Based Fees

Performance-based fees have always been a staple of the hedge fund industry, providing wealthy investors with the comfort of knowing that their money managers have a personal incentive to outperform the market.

The famous “two-and-twenty” fee structure refers to hedge fund managers taking 2% of assets under management as a base fee, and in addition taking 20% of all returns that exceed or outperform a given benchmark (such as the S&P 500) or a “high water mark”  (the highest net asset value previously seen at the end of the fiscal year). 

Mutual funds and financial advisors, for the most part, do not embrace the performance-based fee structure, and simply take a fixed fee based upon clients’ assets under management [AUM] – meaning they charge the same fee regardless of whether their fund (or investment) tanks or beats the market.

Given the obvious and mutually beneficial value of employing such a fee structure, more and more investors are seeking out financial advisors and investment advisors that offer performance-based fees.

Why shouldn’t ordinary investors be able to invest the way the wealthy do?

After all, there is a certain feeling of injustice in knowing that your financial advisor or money manager is raking in the same amount of fees win or lose. Performance-based fees help ensure that your financial advisor is sharing the profit – and the pain – of the investments they are making on your behalf.

While performance-based fees appeal to all investors seeking a financial advisor, there are currently restrictions on what types of investors can be charged such fees.

Under the Advisers Act of 1940 (the Advisers Act), RIAs (Registered Investment Advisors, which include most financial advisers) can only charge performance-based fees to “Qualified Clients.”

“Qualified Clients” are currently defined (under Rule 205-3) as clients who have assets under management with the RIA of $750,000 or more, and clients who have a net worth of $1.5 million or more.

However, as the demand for performance-based fees increases among investors of all types, we can expect that in the future, performance-based fee investments may become available to a wider range of investors.

We hope this helps.  Let us know. 
Thanks — The All Financial Advisors Team

Differences Between Stock Brokers and Financial Advisors: Fiduciary Duty 
There has always been a certain appeal of having a personal stockbroker. Someone at the “front line” of the global marketplace, an industry insider, ready to offer investment opportunities that the ordinary investor may miss, never hear of or even have access to.

Brokers develop relationships with their clients, often providing them with a sense of security, representation and access.  Brokers do well when their clients’ investments do well, and giving bad advice is simply bad for business.  So surely, as financial representatives, brokers are required to give the best investment advice possible, and to put the interests of their clients ahead of their own.  Right?

Astonishingly, NO.

Because “broker-dealers” are regulated far less strictly than “investment advisors” under SEC law, brokers do not have a fiduciary duty to clients.  A fiduciary duty is the highest standard of care at either equity or law. 

A “fiduciary” (such as a financial advisor) is expected to be extremely loyal to the person to whom he owes the duty (the “principal”); fiduciaries must not put their personal interests before the duty, and must not put themselves in a position where their personal interests and their fiduciary duties may conflict.  If a broker recommends a client buy a given stock – and receives a commission from their firm for selling that stock – there is an inherent conflict of interest.

Brokers will often push investment products upon clients not because they are best for the client, but because the broker has a financial incentive to sell that product. 

Because brokers are not bound by fiduciary duty, such conflicts of interest are not only legal, but also quite common.

Many financial advisors and investment advisors, on the other hand, are bound by fiduciary duty.  They are legally bound to put their clients’ interest above their own, and to avoid conflicts of interest – often resulting in more objective advice than one would receive from a stockbroker pushing certain products upon clients for their own benefit. 

Ensuring that your financial advisor, financial planner or investment advisor is bound by fiduciary duty is a very important distinction to make – if you are seeking this degree of care, conscientious advice and objectivity, don’t expect it from your broker.

NOTE: Experts recommend contacting 2-3 financial advisors or financial planning firms, in order for an individual to contrast and compare each financial advisor or firm; thus making the best-qualified choice for their unique situation.

This online resource of financial advisors is a directory of independent, Registered Investment Advisors (RIAs) managed by FINRA and the SEC (United States Securities and Exchange Commission).

DO YOU HAVE A FINANCIAL QUESTION????
Ask us via our blog post [comments section] and…
we will post your question & answer in the next day or so…
Thanks.  The AllFinancialAdvisors.com Team

 
Financial advisors have varied educational backgrounds, work experiences, and specializations.  Finding the right financial advisor, wealth manager, money manager and/or financial planner takes the right research. 

It requires Trust in the source. 

We are an independent 3rd party database of high-quality financial advisors and financial planning firms and if you have noticed… there is NO advertising on this directory.  That’s not what we are about.  We are about helping our consumer base find the best financial advice for their particular situation.  That’s you!

Every person has uniqueness to their financial landscape along with their unique goals.  Financial advisors gain credentials in a wide variety of specialized areas in order to serve their client’s specific needs.  We feature select financial planning professionals, wealth managers and financial advisors across the US from which to choose. 

The AllFinancialAdvisors directory is a “matching service”  so that consumers and investors alike can find the right match for their unique situation.

It’s really easy.  Just Start by entering your Zip Code.

NOTE: Experts recommend contacting 2-3 financial advisors or financial planning firms, in order for an individual to contrast and compare each financial advisor or firm; thus making the best-qualified choice for their unique situation. 

This online resource of financial advisors is a directory of independent, Registered Investment Advisors (RIAs) managed by FINRA and the SEC (United States Securities and Exchange Commission).

Many of the financial planners within our directory explain how their financial planning process works within their profiles.  Our financial advisors take fiduciary oaths and pledge to uphold the highest standard of ethics. 

After reviewing their profile pages, you can request more detailed information, their fee schedule and/or a meeting.   You can have us make that match if you prefer.

Many of our advisors are members of the National Association of Personal Financial Advisors (NAPFA: the nation’s leading organization promoting Fee-Only comprehensive financial planning) and the Financial Planning Association (FPA).

Excerpts written by Ara Oghoorian, CFA: ACap Asset Management
(Beverly Hills, CA).

If you’re like most Americans, ringing in the New Year also means resolving to change old habits, or start new ones. Year after year, getting one’s personal finances in order consistently ranks as one of the top 5 New Years resolutions.  As with any resolution, the hard part is not making the promise, but actually putting it into action – consistently.   

Monitor Your Credit Rating / Credit Scores
A good credit score is the single most important factor in getting a bank loan to buy a home or a car, among many other things. Therefore, it is crucial to check your credit report; one overlooked mistake can cause havoc when you least expect it. Under current laws, you are entitled to a free copy of your credit report each year. Put a reminder on your calendar to check your credit every January.

Put Your 401K and Other Savings on Auto-pilot
If your employer has a 401k (403b, 457, etc.) plan, contribute the maximum amount while still maintaining a manageable lifestyle.  If you have maxed out your 401k and can still save some more, open either a Roth IRA (if you qualify) or a non-deductible IRA and contribute any additional savings. While your current income is finite, your future needs are infinite. If you would like to save for your child’s college education, only do so after you have saved for your own retirement. As I tell my clients, you can always borrow for college, but you can never borrow for retirement.

Pay Off Credit Cards
If you carry a balance on one or more credit cards, select the one with the highest interest rate and begin aggressively paying down the balance. If you can only make the minimum payments on your credit cards, begin cutting non-essential monthly expenses to devote more funds to paying off the debt.

Meet with a Fee-Only Financial Advisor
You don’t need to be a millionaire to benefit from working with a competent financial advisor.  A Fee-Only financial advisor can help you: identify or sharpen your financial goals; develop a detailed written plan to help keep you on track; identify an appropriate asset allocation that is commensurate with your circumstances; minimize your taxes; and most importantly, put your plan into action and provide you with detailed updates.  A Fee-Only financial advisor is like a doctor for your finances.

SUMMARY: Executing on all four (4) of these steps and you are certain to see tangible improvements in your financial health.  May your 2011 be a prosperous and healthy year for you and your family.
***

AllFinancialAdvisors.com: Many of our advisors are members of the National Association of Personal Financial Advisors (NAPFA: the nation’s leading organization promoting Fee-Only comprehensive financial planning) and the Financial Planning Association (FPA).  Using the services of a qualified financial advisor and/or Wealth Manager (to help you identify the strengths and weaknesses in your financial picture) will ensure you can retire comfortably!  NOTE: Experts recommend contacting 2-3 financial advisory firms, so that one may compare/contrast each firm, thus making the best-qualified choice.

What are you thankful for today?

In honor of the Thanksgiving holiday, let’s look at five reasons to be thankful you have a financial advisor:

5. You don’t have to spend your day clicking around at do-it-yourself stock trading sites, because your financial advisor has carefully created an investment plan tailored to your unique financial situation and future goals.

4. As others are retiring without any savings to speak of, your financial advisor has made sure you have a workable savings plan . . . and by following it, you know your retirement goals are within reach.

3. You can sleep at night knowing the estate plan your financial advisor helped create will safely pass your assets on to your family, reduce your estate’s tax liability, take care of your loved ones, keep your business running without you, and more.

2. While the average household’s debt is growing, yours is either rapidly dwindling or nonexistent, thanks to the financial plan your advisor developed for you to follow.

1. No matter what the economy is doing or what the national political landscape looks like, you know your financial advisor is on top of things and will guide you safely through any rough financial waters to come.

If you don’t already have a financial advisor, take the time now to search the All Financial Advisors database to find one in your area. And on behalf of everyone at All Financial Advisors, have a safe and happy Thanksgiving!  

Financial planning is not much different for military families than it is for civilians, but there are some areas where service members and their families should take care — particularly if they’re likely to be deployed.

Fortunately, there are some fantastic resources (and many knowledgeable financial advisors) available to help with the big three: Saving, debt reduction and building wealth over time.

The military handles estate planning and group life insurance exceedingly well. If there’s a chance you’ll be deployed, make sure you max out the service member group life insurance that’s available to you. It’s not expensive, and it will give you peace of mind while you’re away from home for an extended period of time.

You’ve probably heard of the emergency fund. Now is the time to create one for your family. You should have at least six months’ expenses saved, but if you’re going to be deployed, be as aggressive as possible with your savings.

Keep a secure file with all your financial information in it, including account numbers, monthly bills, insurance policies, etc., and make sure your spouse knows where it is in case you’re deployed.

There are some fantastic financial resources available to you as a member of the military, and we encourage you to look into them. SaveandInvest.org is a free project of the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation; 50% of the site is solely for service members and their families. You can go there for free, unbiased information and get answers to your questions about saving and investing.

MilitarySaves.org is another solid resource. It, too, is non-profit; it’s operated by the Consumer Federation of America and sponsored by the FINRA Investor Education Foundation. MilitarySaves.org is dedicated to helping you save, reduce debt and build wealth over time. The site has an impressive list of resources to help you with financial planning.

If you’re not comfortable handling your finances alone, if you don’t have time to take on financial planning, or if you’d just like some additional guidance, look through the All Financial Advisors database to find a financial advisor who’s experienced in working with military families.  You can also read our blog post about questions to ask when evaluating financial advisors and read through the All Financial Advisors FAQ to get a better feel for what financial advisors do and how to choose a financial advisor.

And finally, thank you for your service to our country.

What Do Women Want from Financial Advisors? 
(and is it really that different from what men want?)

Earlier this month, Ameriprise Financial® released the results of its New Retirement Mindscape II study examining gender differences in attitudes toward, and planning for, retirement. Of particular interest to All Financial Advisors: What women want in their financial advisors.

The study found that 46% of women have sought retirement advice from a financial advisor; only 38% of men have. And the more time their financial advisors take to educate them, the happier women are: 63% say that is a highly important attribute in a financial advisor, while only 52% of men say the same.

Even more women — 69% — want a financial advisor who “provides a knowledgeable point of view,” and 58% of women are looking for financial advisors who will coach them on reaching their goals for retirement. Finally, 55% of women want a financial advisor to tailor financial guidance specifically for them.

The portion of the Ameriprise Financial study dealing with attitudes toward financial planners seems to clearly indicate women want to work with comprehensive financial advisors — just like those you can find here at All Financial Advisors. A comprehensive financial advisor will typically take time to educate clients on financial matters pertaining to them, coach them on defining their retirement goals and on following a financial plan, and provide a customized plan of action.

How about you? What are you looking for in a financial advisor? It’s the perfect time of year to think about your financial goals — and to find the right financial planner for you! Start today. Find a financial advisor in your area and get ready to start the new year off right!