Salesperson vs Professional Advisor
There are over 600,000 “financial advisors” in the US. But most are salespeople selling financial products.
Unfortunately, anyone can call themselves a financial advisor.
From stock brokers, insurance agents, and investment salespeople all the way to a private Advice-Only fiduciary, they are all technically right.
Just like the guy who can only change tires is technically a mechanic. The guy who only changes oil is also a mechanic. Just like the guy who sold you the air-filter and exhaust that you did not really need.
But they are probably not ASE Certified Master Mechanics. And you should probably not let them work on your air-conditioning, or engine… let alone let them reprogram your computer or worth inside your transmission.
By the same thread, a skilled salesperson may be able to give you some good advice, but they are fundamentally still a salesperson. They usually do not even have the education to even be aware of what they should know. They are not a professional financial advisors, and certainly not real financial planners. But how do you tell? One way, is by the way people get paid.
If a doctor got paid by a pharmaceutical company to push pills, then even though they have the education, they would really be a salesperson not a professional. In the same way, if your “advisor” is getting paid by anyone but you… you have a salesperson, no matter how educated they are.
We are the only advice only, fee-only, 100% fiduciary firm in southern Illinois.
Our clients work with a CERTIFIED FINANCIAL PLANNER™ Professional, working on a fee-only, fiduciary basis. We are bound by law to make all recommendations in your best interest, with a Professional Duty of Loyalty and a Professional Duty of Care. We only get paid by you, that means we only work for you. No fine print, just transparency and simple flat fee.
How to identify a REAL Financial Advisor or Professional Financial Planner: They will ideally have 7 or more of these attributes.
Only 12,993 registered investment advisors (RIAs)
The will have a licence to give advice: such as Series 63, 65, or 66.
Only about 3,000 NAPFA-Registered Financial Advisors.
All the other “advisors” get paid commission for selling products.
Most people who claim to be fiduciary can “switch hats” and the put their salesperson hat back on. A Professional Fiduciary is a 100% Fiducairy, all the time.
There are only about 100 Advice only firms in the US. It is model with the fewest conflicts of interest.
CERTIFIED FINANCIAL PLANNER™ indicates that been trained and educated in how to provide comprehensive financial advice on technical subjects. And that they can address needs in most areas of your life.
Ideally have a Bachelors in Personal Finance, Taxation, Business, or psychology.
It is OK, but less ideal to have a degree in marketing, etc… just make sure it is’t in underwater basket weaving.
Ideally hold an additional useful advanced technical designation. Like the CDFA (Certified Divorce Financial Advisor) or the CSLP (Certified Student Loan Planner).
Ideally hold an advanced advice designation, or at least have integrated the training from the education. Like the CFT-I™ (Certified Financial Therapist), CeFT® (Certified Financial Transitionist) ; or at least the Personal Financial Coaching or Grief Counseling education.
They will NOT have any Product Sales Licences: Series 3, Series 6, Series 7.
They will NOT have licences to sell: health, life, auto, property, casualty insurances.
Someone providing Oversight & Guidance cannot be the primary provider of your products & services. A person cannot ethically be the auditor of work that they do. And so, your a real financial planner is a coordinator of the various financial services you use.
A Fiduciary is a person who is named in a private agreement or by a court to assume responsibility for a position of trust. Fiduciaries handle affairs on someone else’s behalf while they are still alive and/or after they have passed away. Individuals who serve as professional fiduciaries tend to be Advice-Only Certified Financial Planners, trust company officers, Certified Public Accountants, or attorneys.
Private Fiduciary is a service with many names: Personal fiduciary, private trust, private client, private wealth management, or private banking services.
Individuals serving as a trustee, executor, personal administrator or discretionary agent having direct or indirect responsibility for managing assets for or on behalf of individuals and families, as well as estates, trusts, private foundations and other entities they establish or control.