Broker Check

Frequently Asked Questions

  • A: A Wealth Management team will be able to connect all of the financial dots in order to provide you with an overall plan to meet your financial goals. The team should have training and experience in a broad range of financial products that impact your life – securities, retirement plans, employer benefits, insurance, taxes, debt, budgeting and estate planning are all examples. These are all inter-related and critical to creating the right recommendations for your personal situation.

  • A: The fees will vary depending on the education and experience level of the members of the team as well as the services provided. Additionally, the way the fees are assessed will also impact the cost. In general, a Wealth Advisor will charge based on one of two ways: asset based fee or charge based on services provided. If a Wealth Advisor charges an asset based fee, the amount will usually be a percentage of the assets under management. If the compensation structure is service related, he or she will typically charge an hourly rate or will quote a specified fee for the services provided. Please review the specifics of the service agreement for each individual situation.

  • A: There are a number of different wealth advising certifications available. Three of the most common designations are Certified Financial Planner (CFP), Chartered Financial Consultant (CFA), and Investment Advisor. At the very least you should make sure that he or she is licensed and in good standing with the licensing authority (FINRA).

    A Certified Financial Planner (CFP) has competency and experience in all areas of financial planning. A CFP has completed courses of study in over 100 topics of financial management including equities, taxes, and retirement planning. He or she must also follow the Certified Financial Planner code of ethics. A CFP has a fiduciary responsibility.

    A Chartered Financial Consultant (ChFC) also has extensive experience in helping individuals assess their financial goals. In order to obtain the ChFC certification, a candidate must complete the program and pass the tests administered by the American College.

    An Investment Advisor doesn't need any special training or certification. However, an Investment Advisor must be registered with the security agency of the state in which he or she does business, and must also be registered with the securities governing body FINRA. An Investment Advisor must also pass a number of federally and state required licensing exams.

  • A: Your plan should be to interview several Wealth Advisors to find one that meets your investment style, has a comprehensive and defined approach to managing clients, is open about his or her fee structure, and discloses any conflicts of interest. During the interview process, ask questions that address these main points. Ask the advisor for references or even current clients and follow up with them to make sure the advisor is trustworthy.

  • A: If a wealth advisor is a Certified Financial Planner, check the Certified Financial Planner Board of Standards. The Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC), and the National Association of Securities Dealers (NASD) are also places to check and make sure the Wealth Advisor has not had disciplinary action taken. Another great source of information is the advisor's past clients. A good advisor won't be afraid to hand out two or three solid references.

  • A: Seek out an advisor with years of experience and depth of knowledge. Look for an advisor who addresses the collective picture not just investments. Choose a Wealth Advisor who has experience dealing with clients in similar circumstances to yours and who has a team capable of handling all of your needs. You'll also want to make sure that the Wealth Advisor you choose has your best interests in mind, and that he or she isn't selling you products that are not suited to your needs. Interview prospective Wealth Advisor and ask them about credentials, management strategies, and history of performance. Ask for existing clients as references.

  • A: Seek out advisors who are strictly fee-based (as opposed to commission-based) is a good choice if you're concerned about the advisor pushing products. Additionally, a Certified Financial Planner has a fiduciary responsibility to put your needs and interests above his or her own. While a CFP may profit from a product that is recommended to you, it is unethical for a CFP to recommend a product that is not in your best interest.

  • A: The key to successful financial planning is finding an honest and knowledgeable wealth advisor that has your interests at heart. Any financial management company can potentially employ such an advisor. It's great to side with a company that has a good track record of customer support, positive returns, and open fee structure, but don't focus on this too much. Focus on finding an excellent advisor, with significant experience and exceptional references above all else.

  • While your Wealth Advisor may make a different recommendation based on your particular circumstances, it's a good idea to see him or her at least once a year. You should also consider making an appointment in anticipation of life-changing events such as marriage, the birth of a child, divorce, or after inheriting a large amount of money.

  • A: Financial planning looks at a person's overall financial picture. A Financial Planner will often ask a prospective client to fill out an extensive questionnaire in order to understand his or her financial needs and goals. The planner will usually put together a detailed, short-term 5-year plan designed to improve the client's overall financial position. That may be followed by a long-term plan, along with suggestions about how to save and invest for retirement and a child's college education at the same time. The planner will also look at ways to reduce current and future tax liabilities and protect assets by having the proper life, health, disability and long-term care insurance coverage in place. Finally, he or she may offer insight and suggestions on other important areas of wealth. These areas might include but are not limited to estate planning, proper debt management, employer benefits and retirement plans.

  • A: Asset allocation refers to the diversity of your entire savings and investment portfolio across asset classes. Stocks, bonds, cash and real estate are asset classes. Diversification refers to the types of investments held within each class. For example, both 3M and Union Pacific are high-cap equities in the Industrials sector. Because they're in the same sector, these two stocks are likely to move up or down together. However, Tyson Foods is in the Consumer Staples sector. It is not likely to move in tandem with 3M or Union Pacific. Owning 3M and Tyson Foods provides diversification within the asset class of stocks. But that's not enough. A portfolio that invests in multiple types of assets, not just stocks, is also important.

  • A: Time horizon refers to the amount of time a person has to save for a particular event. For example, the time horizon for a college savings account might be 10 years for the parents of an eight-year old child, but 15 years for the parents of a three-year old. Likewise, the time horizon for a 30-year old saving for retirement might be 35 years, whereas it might be 15 years for a 60-year old who started saving late in life.

  • A: Financial planning covers all aspects of a person's financial well-being. This includes savings, investments, retirement and college savings plans, insurance coverage, and estate planning. Retirement planning covers only investments made for retirement.