From debt payment to investments to long-term saving, getting the help of a financial advisor to address your financial profile can allow you to target a course of action to fulfill your needs and help you make significant progress towards achieving your financial goals. A financial advisor is a professional who offers guidance and services specific to the financial circumstances of their clients. This means that regardless of your financial needs or situation, a financial advisor will help work with you individually on your own financial profile.
Title Versus Specialty
Meeting the needs of a diverse client base means that there is a wide variety of financial advisors available. In fact, the difference between a financial or investment planner and wealth or investment advisor can be huge, depending on where the planner/advisor works and how they define themselves. That said, the title of an advisor isn’t everything. For example, no matter if they advertise themselves as a financial or investment consultant, an advisor/planner who works at an insurance company is likely to have an individual focus on selling insurance. By the same token, retirement planning often also revolves around the sale of an insurance product. An advisor/planner who works for a large bank or brokerage firm will focus on selling proprietary funds and investments to the client and providing loans through the banking arm.
It is equally important to consider whether or not the individual is a fiduciary. An independent fiduciary advisor/planner who is not tied to an insurance company or bank and is also a fiduciary provides comprehensive financial planning that goes beyond just managing a portfolio. These individuals advise on insurance, estate planning, taxes, real estate, college planning, mortgages, student loans, and almost anything financial related to help the client make more informed decisions.
This confusion among titles is exactly why we need a uniform license issued and governed by a state, similar to the CPA license for those engaged in the profession of taxes. This consistency will allow clients to understand the specific capabilities of their financial advisor and select an individual who can address their particular needs.
Moving Forward
As you determine what kind of advisor you need, there are questions you can ask them to gain an understanding of their specialties and abilities:
- What is your scope of services?
- Are you a fiduciary?
- How are you compensated?
- Will you advise me on the purchase of real estate, the taxation of stock options, the decision to refinance my mortgage, and how much I should save for retirement and college?
- Are you a CFP?
Ara Oghoorian, CFA, CFP®, CPA is the President & Founder of ACap. ACap Advisors & Accountants is a “Fee-Only” wealth management and full-service accounting firm, specializing in helping doctors and healthcare professionals make sound financial decisions.
Contact ACap at info@acapam.com or 818-272-8511.
