I cancelled my subscription to this socialist rag years ago, but I can’t bash them for reaffirming public perception of our field’s utility. ============================================================== http://www.nytimes.com/2008/09/10/business/businessspecial3/10PLANNER.html?_r=1&ref=yourmoney&oref=slogin ============================================================== Some Advice on Getting Good Advice By FRAN HAWTHORNE Published: September 10, 2008 YOU used to be able to handle your finances on your own. But your life has grown more complex. Along the way you have acquired a beach house, a boat, two Dale Chihuly glass sculptures, an executive retirement package and stakes in a couple of new hedge funds. It’s time for professional help. You need someone to manage your investments, map out a tax strategy, help plan your charitable giving and bequests, analyze the gaps in your insurance coverage and generally put your financial life in order. Can one person do all that? And how do you find that miracle worker? “As clients progress upward in wealth, they need a professional who’s going to look at all of their assets, all the risks they’re exposed to, and bundle it together,” said Christopher Cordaro, chief investment officer of RegentAtlantic Capital, a wealth management firm in Chatham, N.J., that aims to provide such service for people with at least $1 million in assets. Advisers like Mr. Cordaro are not experts in every area. They work with other experts — either colleagues within their firms or outside specialists — while they coordinate the pieces. For instance, RegentAtlantic, with a staff of 40, will suggest tax-saving strategies, such as establishing a private charitable foundation just before retirement, but it does not prepare tax returns. Similarly, a financial adviser might determine how much insurance is needed for that new boat and beach house, then bring in brokers to write the policies. Sometimes an adviser might consult a risk manager on the appropriate level of insurance coverage. Thomas R. Livergood, chief executive of the Family Wealth Alliance, a consulting firm in Wheaton, Ill., said people should go about finding an adviser the way a business seeks bids for a project: prepare a list of questions, send out queries and interview three finalists. But which questions should you ask? Experts pinpoint four critical topics — credentials, experience with clients whose situations are comparable to yours, personal chemistry and the payment method. Financial advisers and planners are not regulated by any government agency, but the industry has developed two sets of commonly used qualifications, one for a certified financial planner, or C.F.P., and the other for a chartered financial analyst, or C.F.A., who in addition to giving financial advice manages investments. Both require passing tests administered by industry-run boards. Financial advice might also come from trust or tax attorneys, certified public accountants or a qualified person with a finance degree from a business school. “The single most important thing is to have a core degree” related to finance, said Rich Kohan of PricewaterhouseCoopers’ private company services unit, which provides financial advice to clients with at least $2 million in assets. Beth C. Gamel, a co-founder of Pillar Financial Advisors, a small financial planning firm in Waltham, Mass., near Boston, had a different priority. “At that level of wealth, there’s probably not a single financial decision that doesn’t require that the planner have a decent understanding of taxation,” she said. Of course, education is only the beginning. Experience is also important — in particular, experience with people like you. Entrepreneurs who own their own businesses have tax, cash-flow and retirement concerns different from heirs or executives in big corporations, even if all three have exactly the same net assets, and they should hire advisers who have worked with entrepreneurs. If you have children with special needs, you might prefer a planner who is experienced in planning estates for parents of special-needs children. In fact, one of the best ways to find a planner is through references from friends in similar situations. Ms. Gamel of Pillar Financial said people interviewing planners should ask them to describe a typical client. “You want a response that makes you say, ‘That sounds like me!’, ” she said. An initial interview is also a good time to gauge the planner’s personality. Does the planner listen to you or rush on to the next question? Do you feel comfortable talking with him or her? Such concerns may seem trivial; after all, you are hiring a financial pro, not a best friend. But you will be discussing a lot of personal issues and probably speaking at least once a month. “This is not a surface relationship,” said Richard C. Salmen, president-elect of the Financial Planning Association, a trade group. “It’s going to mean to a certain extent baring your soul.” Another large issue is how the adviser is paid. Planners can charge a flat retainer, an hourly fee, a percentage of the assets under management or a commission based on the products the client uses. Most advisers are paid on commission, according to Mr. Salmen, but the asset-based method is gaining popularity. “It tends to be a good gauge of the complexity of the client,” said Mr. Cordaro of RegentAtlantic. The hourly arrangement is probably used the least often, mainly for one-time projects. Ms. Gamel’s firm charges a retainer if the client’s asset base is small. Critics of the commission system say it is fraught with conflicts of interest. “If you know that your adviser is only getting paid by you, rather than getting paid from products they put you in,” you can expect the advice to be impartial, said Ross Levin, president of Accredited Investors, a wealth management firm in Edina, Minn. But Mr. Levin acknowledged that the asset-based method he generally uses could also lead to conflicts. When Accredited Investors recently transferred $200,000 out of the assets it managed for a client to set up a charitable gift annuity, it lost about $2,000 in fees, he said. Can you be confident your adviser would put your interests first? Surprisingly, experts say the size of the firm isn’t too important, as long as it’s not a lone person with a shingle. Even a small shop like Pillar Financial, with a staff of 14, can use other experts for specialty work. Large companies have other advantages. For example, if the planner you’ve worked with leaves, you have a better chance of finding a compatible replacement. The crucial factor, however, is the firm’s culture. “If you work for I.B.M., maybe you’re better off at a big bank,” Ms. Gamel said. “If you own a small business, maybe you’re more comfortable in a smaller setting.” ==============================================================
Wow, an offhand mention of the designation and you think it’s newsworthy? That’s like a Canadian wetting himself when anything about Canada is mentioned on “Two and a Half Men.” (Yes, I am Canadian, and yes, I do wet myself when they mention Canada on 'merican TV.)
L3 Buckaroo Wrote: ------------------------------------------------------- > Wow, an offhand mention of the designation and you > think it’s newsworthy? That’s like a Canadian > wetting himself when anything about Canada is > mentioned on “Two and a Half Men.” > > (Yes, I am Canadian, and yes, I do wet myself when > they mention Canada on 'merican TV.) TMI Thanks
Funny, if anything that article denigrates the designation by mentioning it in the same light as the CFP. Still a socialist rag.
L3 Buckaroo Wrote: ------------------------------------------------------- > Wow, an offhand mention of the designation and you > think it’s newsworthy? That’s like a Canadian > wetting himself when anything about Canada is > mentioned on “Two and a Half Men.” > > (Yes, I am Canadian, and yes, I do wet myself when > they mention Canada on 'merican TV.) I bet you love South Park then!!! hey i am a CFP level II CFA, dont hate on the CFP! its better known than the CAIA
The CFP has pretty good stuff in the curriculum. I wouldn’t take it because I don’t need it, but it’s definitely not crap.
L3 Buckaroo Wrote: ------------------------------------------------------- > Wow, an offhand mention of the designation and you > think it’s newsworthy? That’s like a Canadian > wetting himself when anything about Canada is > mentioned on “Two and a Half Men.” > > (Yes, I am Canadian, and yes, I do wet myself when > they mention Canada on 'merican TV.) Funny i was convinced you were an aussie. especially your name had me convinced of that…
cjones65 Wrote: ------------------------------------------------------- >one for a certified financial > planner, or C.F.P., and the other for a chartered > financial analyst, or C.F.A., who in addition to > giving financial advice manages investments. Both > require passing tests administered by industry-run > boards. > I am reporting to CFAI for the violation!!!
ws Wrote: ------------------------------------------------------- > cjones65 Wrote: > -------------------------------------------------- > ----- > > > > >one for a certified financial > > planner, or C.F.P., and the other for a > chartered > > financial analyst, or C.F.A., who in addition > to > > giving financial advice manages investments. > Both > > require passing tests administered by > industry-run > > boards. > > > > I am reporting to CFAI for the violation!!! Damn. You got me. My real name is Fran Hawthorne, and I guess I’ll be going for the CFP now.