There are a number of different financial planning certifications. While a financial planning professional can have any of several designations or certifications, at the very least you should make sure that he or she is licensed and in good standing with the licensing authority.
NAPFA, The National Association of Personal Financial Advisors, is the country’s leading professional association of Fee-Only financial advisors—highly trained professionals who are committed to working in the best interests of those they serve. NAPFA ensures that our firm remains compliant with Fee-Only services for your benefit. A Fee-Only advisor is paid only by his or her clients. They do not charge sales commissions, and they do not receive any compensation from investment or insurance providers. As a result, they do not face the conflicts of interest inherent in other compensation models.
One of the major benefits of selecting a Fee-Only advisor is a freedom from the inherent conflict of interest that can arise when a significant portion of the advisor’s income comes from selling financial products. Fee-Only financial advisors provide advice and ongoing services for transparent fees, but many advisors are paid to sell you investment products for big commissions.
The concern you should have as a potential client is whether or not the advisor is recommending a certain financial product because it enhances their bottom line and if the products recommended are truly in your best interest. The greater the advisor’s dependence on commission income, the greater the conflict. In the end, the conflict can cost you, both in out-of-pocket expenses and in the quality of the advice you receive. We believe there is a significant conflict of interest if an advisor stands to gain financially from any recommendations you may follow.
Another advantage of using a Fee-Only financial advisor is the opportunity for them to offer an objective second opinion of your current financial situation and investments. Because we can work with clients on a Fee-Only basis, we can complete a financial review of your current investments and financial situation to determine if you are on the right path to meet your goals.
See the NAPFA Fiduciary Oath.
See the ADV Part 2 brochure outlining our Fee-Only Services.