What is a financial planner?įinancial planners, whether hired independently or through a bank or wealth management firm, are often sought out to aid in the creation of long-term financial goals, by creating a plan that covers investing, budgeting, saving and retirement planning.īecause there’s no singular organization that doles out the financial planner title, nor are there legal requirements (and therefore anyone can claim to be one), it’s important for consumers to thoroughly vet potential planners and make sure their credentials are legitimate.Ī good starting place to conduct preliminary research is through the Financial Industry Regulatory Authority (FINRA), which offers a free online tool to search brokerage firms as well as the people associated with them. Looking for a new financial adviser? This tool can match you to an adviser who meets your needs. To find someone who fits the bill, consider searching the National Association of Personal Financial Advisors (NAPFA) site or the Certified Financial Planner Board (CFP)’s Let’s Make a Plan site. ![]() If you’re looking for help with your investments, pros recommend working with a fee-only fiduciary financial adviser to ensure your best interests are put ahead of their own. A registered investment adviser (RIA), on the other hand, will provide advice on securities investments and is a true fiduciary under the law - even though they’re technically lumped into the same financial adviser category as someone selling products and earning commissions. What gives? How a financial adviser helps their clientsīecause the term financial adviser doesn’t encompass a fixed set of skills, there are numerous ways financial advisers help their clients.įor one, in addition to managing investments, financial advisers may provide services that include saving for college, navigating long-term healthcare and maximizing tax deductions.Īn insurance salesperson can be classified as a financial adviser, even though this person is likely paid a commission and sells a specific product. See also: ‘It sounds like a conflict.’ I have an adviser who claims to be a fiduciary, but sells me mutual funds. ![]() “Some financial advisers do comprehensive planning while others operate as subject-matter experts,” says Hodges. This indicates that they are ethically and legally bound to put their client’s interests ahead of their own, meaning they can’t earn a commission for recommending or selling a specific financial product or investment.Īs if it’s not convoluted enough, certified financial planner Derieck Hodges at Anchorpointe Wealth Management says, rather than focusing on the title, ask the financial professional to describe what they do. While many financial advisers operate in a fiduciary capacity, only Registered Investment Advisors (RIAs) are governed by the Investment Advisers Act of 1940 and are legally considered true fiduciaries. These questions can help you determine if a financial adviser is a good match. ![]() Here are 15 questions you should ask any financial adviser before you hire them. That means credentials designations are key for you to look at, as is understanding exactly how the professional gets paid. Virtually anyone can use this term from insurance agents to certified public accountants (CPAs) and 360 degrees in any direction among financial service providers,” says David Maurice, certified financial planner at Worthwhile Wealth. Yet, it’s the most often used term to describe a variety of financial professionals. “Financial adviser is strictly a marketing term with no legal or technical definition. Because these professions all fall under the financial adviser umbrella, consumers should look at a professional’s specific designations (more on that below) to learn more about their expertise and the services they offer. The title financial adviser is actually used by various personal finance professionals including stockbrokers, money managers, insurance agents, and bankers. That said, there are industry certifications and designations - like certified financial planner, chartered financial analyst and chartered financial consultant - that require a certain level of education, training and experience to hold. One big thing to note here is that the terms financial planner and financial adviser aren’t federally regulated, so plenty of people might refer to themselves as a financial adviser or financial planner and do different things. Is there a legal difference between financial planners and financial advisers?
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