Navigating the financial advisory landscape can be daunting. Terms like “fee-only,” “fiduciary,” and “broker-dealer” often add to the confusion. Here’s a straightforward guide to help you make an informed choice.
1.) Understand Compensation Models
Advisors are typically compensated in one of three ways:
- Commission-Based: Earns money by selling financial products.
- Fee-Only: Charges clients directly, avoiding product sales commissions.
- Fee-Based: A combination of fees and commissions.
At Beyond Balanced Financial Planning, we operate as a fee-only advisor. This ensures transparency and aligns our interests with yours, free from product sales incentives.
2.) Fiduciary vs. Suitability Standards
- Fiduciary: Legally obligated to act in your best interest.
- Suitability: Recommendations must be suitable, but not necessarily optimal.
We proudly adhere to the fiduciary standard, committing to prioritize your financial well-being above all else.
3.) Broker-dealer vs. Independent?
- Independent Advisors: Operate without affiliations to financial product providers, reducing potential conflicts of interest.
- Broker-Dealers: Often tied to specific products, which may influence their recommendations.
We are independent which provides us with a broader range of options tailored to your unique needs, not making us captive to one or a few providers. You will also never see use selling you a weird insurance or investment product that you don’t understand or need.
4.) What are your qualifications?
In the advisory world, there are licenses and credentials. The Series 65 is a securities license required for individuals to act as investment advisers (those who work for independent registered investment advisors) in the US. The Series 7 is a securities license to sell financial products under a broker. Both of these licenses can be acquired by simply studying and taking an exam. No other educational or work experience is required.
Credentials hold much more weight when you are evaluating who to work with. For example, I am a CERTIFIED FINANCIAL PLANNER™ professional (CFP®) meaning at a minimum that I have a Bachelor’s degree, at least 3 years of experience (I have 19+), and passed an extensive exam that has a 60% pass rate. Then of course there are Chartered Financial Analysts (CFA®), and finally, Personal Financial Specialists (PFS™) which are CPAs who have additional expertise in financial and wealth management. These three – the CFP®, CFA®, and PFS™ are considered the top-three credentials in this industry.
Final Thoughts
Selecting the right financial advisor is a significant decision. Prioritize transparency, alignment of interests, and a commitment to your financial goals. At Beyond Balanced Financial Planning, we’re dedicated to providing clear, unbiased guidance to help you navigate your financial journey with confidence.
These are the brand pillars of Beyond Balanced Financial Planning:
- Empowerment Through Education
- Planning with Purpose & Balance
- Faith-Grounded, Family-Focused
- Real Relationships, Not Just Reports
- Clarity over Complexity
Interested in learning more about Beyond Balanced Financial Planning?
- Follow us on social media for ongoing tips, resources, and inspiration. We are on Instagram and Facebook.
- Check out our blog for additional topics on your finances.
- Schedule a 30-minute complimentary session to find out how we can help you.
