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).

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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!

Last week, we talked about how financial advisors can help people just starting out in their professional lives. Today, we’ll talk about a much different life stage: Divorce.

No one wants to think about life taking unexpected turns. Sadly, however, changes like divorce are common — and invariably bring financial upheaval. At a time of such intense emotional distress, dealing with the loss of the financial security you’ve always counted on may seem like an impossible task.

When your life has been turned upside-down by divorce, a financial advisor experienced in helping clients adjust their financial plans after divorce can be a source of comfort and encouragement. Here are a few ways financial advisors can make the turmoil of divorce a little easier to bear:

• Help you understand the financial aspect of all the legal documents. If you know what the divorce papers are saying about finances, you can make better informed decisions.

• Clarify your financial situation. A financial advisor skilled in working with divorce matters will be able to help you sort through your finances, separate what may have been a lifetime of his-and-hers financial matters into just his or just hers, and get a clear picture you and your attorney can refer to, if needed, to reach a fair and equitable settlement.

• Help you focus on your finances. It’s easy to get bogged down in the emotions you’re feeling, but during a divorce, you’ll need to keep your mind at least partially on financial matters as well. Financial advisors can help you do just that.

• Get you back on track. Your budget after divorce will be very different from the budget you followed while married. A financial advisor experienced in divorce will help you create a budget for your new life.

Nothing will take away the pain of divorce, but financial advisors can help relieve some of the associated pressures. If your life has suddenly become unstable due to divorce, now is the time to take action.

Search for financial advisors near you. Interview two or three of them, and see which one you’re comfortable with (ideally, it’s a financial advisor who can focus on helping you rebuild your financial life). Then get started on your new financial plan.

It’s not easy, but with the help of a good financial advisor, you can be financially comfortable — with a solid plan for reaching your goals — once again.  

Financial Life Stages: Just Starting Out

We’ve discussed how financial advisors can help anyone, regardless of income. Now let’s take a look at why you should consider hiring a financial advisor even if you’re just starting out in your financial life.

Maybe you just graduated from college; maybe you’re in your first real job in your chosen career field; maybe you’re newly married. In any case, you’re beginning your financial life - and maybe you’ve never thought about a financial advisor. But could you use the help of a professional financial counselor?

Absolutely. Whether you’re learning to live independently for the first time, considering participating in your employer’s retirement plan or jointly trying to manage two incomes, a financial advisor can help you avoid pitfalls and handle your finances the right way from the very beginning.

Financial advisors don’t just give investment advice or manage the portfolios of the very wealthy. They can also help you establish a budget, determine how to maximize your employee benefits, help you define your financial goals (and recommend savings and investing plans to meet those goals), and even give you expert guidance on setting up life insurance and other estate planning basics.

If you’re young and considering hiring a financial advisor, you have a golden opportunity to get your finances in order right from the get-go. In fact, by taking the time now to evaluate financial advisors and focus on your financial future, you’re setting yourself up for financial security later in life. As we noted in our post on the ING Retirement Research Institute survey, a combined 79% of Americans with financial advisors give themselves grades of “A” and “B” when asked how prepared they are for retirement. Those aren’t insignificant numbers, and they indicate that working with a financial professional can help you feel confident about the future.

Right now is the perfect time to get started, no matter where you are in life. Search the independent All Financial Advisors directory now to find financial advisors in your area. Choose two or three to talk with before you make your decision: Get a feel for whether you could use their services and see which one might be a good fit for you. We applaud you for taking control of your finances early in life!

How Many Americans Utilize Financial Advisors?  Only 25%…

On Friday, the ING Retirement Research Institute released results of a survey that questioned 1,000+ American workers about their retirement plans.

The survey’s findings reveal a whopping 76% of Americans participating in their employers’ retirement plans don’t have financial advisors.

And nearly as many — 73% — have no comprehensive financial plan for retirement (…perhaps because they’re not working with financial advisors…  hint hint).

At the same time, the ING survey found that 52% of people with financial advisors, when asked how they would grade the job they’re doing in preparing for retirement, gave themselves a “B,” while 27% of people working with financial advisors gave themselves an “A.”

Based on the results of the ING survey, it certainly appears that working with a financial advisor helps people feel more confident about their retirement plans and their financial future — and with good reason.

Financial advisors like those listed here on AllFinancialAdvisors.com have the knowledge and experience to help the rest of us manage and grow our money.  If more consumers knew exactly what financial advisors do, how they get paid, and how to choose a financial planner, we might see much higher percentages of Americans working with financial advisors.

That’s why AllFinancialAdvisors.com provides an extensive FAQ section, along with blog posts like this one focused on helping readers feel confident in hiring and working with financial advisors.  We want you to have access to the information you need to find the financial planner that’s right for you.

We firmly believe working with a financial advisor can help you reach your goals and have the financial future you dream of. Why not get started now?

The Time to Act is Now!  Search the AllFinancialAdvisors.com directory, fill out the simple, confidential, no-obligation form, and see what professional financial advice can do for you.

We hopes this helps!

Fiduciary: A Fancy Word For Trustworthy

Webster’s defines fiduciary as “of, relating to, or involving a confidence or trust: as held or founded in trust or confidence; holding in trust.” The word trust appears three times in that twenty-word definition, telling us it all boils down to . . . well, trust.

Fiduciary is a crucial word to remember when you’re evaluating financial advisors.  A fiduciary is bound by law to act in your best interests at all times, even when your best interests are in conflict with the fiduciary’s financial interests.

So what does that have to do with financial advisors?  Plenty.  Never assume a financial advisor is a fiduciary.  In fact, unless your financial advisor is an attorney, a certified public accountant (CPA) or a registered investment advisor (RIA), chances are, he or she is not a fiduciary.  Only lawyers, CPAs and RIAs are automatically fiduciaries.

And why is that important? Imagine a financial advisor who gets a commission for convincing you to invest in certain funds, insurance policies or other financial products. Do you think that advisor will recommend what’s best for you 100% of the time, or will you sometimes be steered in the direction of those financial products that result in a tidy fee for the advisor?

A fiduciary, on the other hand, must disclose in writing any actual and potential conflicts of interest. Fiduciaries cannot receive any compensation from any third party that is contingent upon your purchase of any financial product. They are prohibited from being compensated for referring you to any other professional. They must thoroughly disclose exactly how they are compensated. And they must adhere to a professional Code of Ethics.

You can certainly choose to work with a financial advisor who has not taken the fiduciary oath. But if you want to be sure you can trust the person giving you financial advice, choose a fiduciary.