For someone aiming to work with Personal Finance, do you think its worth getting the CFP after completing the CFA program ?
Yes because the CFA doesn’t teach financial planning to the degree that is needed to be a competent financial planner. If you just want to do just investment management and retirement plans, then no. The CFA is enough.
I got the ChFC instead because it costs less and they are less intrusive on your practice. The CFP board wants to be like FINRA. I’m against adding an unnecessary layer of bureaucracy regulating my practice. Apparently, based on the news, they don’t do a good job anyway.
Besides, most laypeople don’t know the difference between the charters and certifications. CFP advertises a lot but people are confused. You’ll get planning business with just a CFA…
What’s so difficult about asking a client “How much will you require in retirement?”, giving them a risk questionnaire, and then asking my team to construct the portfolio for you?
If thats the logic then anyone can just simply instruct to do those works, I mean if you are in the position to have a team.
Lol! That’s not difficult at all. That’s why they robo’s and customer service.
With investopedia and Chuck, anyone can build a portfolio.
Imagine living in a world, where, you pay an advisor 100 bps a year and he turns around and gives you a portfolio full of mutual funds and etf’s.
We live in that world today btw.
One thing I never understood is how a newbie can know if his consultant is advising him well.
You should ask yourself: Is this advisor serving your needs, or his? Is he filling a sales quota or is he helping you come up with ways to meet your goals. How many tools does he have in his toolbox? Does he value your relationship based on your level of investible assets? Having a target market demographic is not the same thing. I’ve seen colleagues blow off a prospect because the expected commission or fee was too low for thier liking. I’ve seen clients only reveal thier real level of assets after I’ve helped them solve a problem that only nets me a few bucks from a term life policy. They see I value them, the relationship, and their goals. Does the advisor make assumptions about you? Do they fit you into a cookie cutter program, or do they ask questions about you and try to really help you solve your problems? Problems that may be working to find a good attorney for an estate planning case, or finding a CPA for a tax planning question, helping with planning for family members with special needs, or planning how to pay down student loan debt. Everything can’t be solved with a asset allocation mutual fund and a term life policy.
Usually, the commission is what % of the invested amount?
Can someone hire a consultant just to ask some questions? (without applying)
Yes you can hire some financial planners just to answer questions. For me, you don’t have to apply for anything. I’ll charge a fee. The fee depend on the particular planner and the complexity of your case. For me it’s from $500 for a small consultation to $5500 for a comprehensive financial plan that includes business planning. I’ve seen guys charge $25,000. I don’t get investment commissions. I charge a fee up to 1%. I do get insurance commissions and those vary by the carrier. They’re usually from 50% to 110% of the first year premium. It also depends on the product.
I got my CFP before the CFA. Its easy and took me a lil over a month.
Commissions is typically depended on product. It can be as low as 1% or as high as 7% of amount invested. It is a one time pay and not an annual charge.
Asset based fee for management of wrap accounts is what you’re probably thinking about. This isnt considered a commission. I charge based on asset level: $250k to $500k is 1.15% annually, $500k-$1m is 1%, $1m to $3m is .9%, etc.
Fee based plans is a fee charged to deliver advice or a plan. I charge $1200 minimum and go as high as $10k. this is the route if someone wants to have questions answered or want advice.
its called being trustworthy. It has nothing to do with advising well. 9 out of 10 in the business are gone in 6-12 months. Not an easy business.
OP: the client needs to ask the advisor - “how are you compensated for your services, or how do I pay you for your services”.
Looks like we have a few other advisors here on the board, nice to see.
I’m curious to hear how your clients respond when you charge a fee for the financial plan, in addition to the AUM fee. (I’m in Canada - tried charging for planning plus the AUM fee on quite a number of prospects - it didn’t go very well…).
How can you provide financial planning services to clients, if you don’t hold a planning designation (CFP, ChFC)?
It’s a designation not a license. You can do financial analysis without a CFA…
But you DAMN sure cannot generate superior returns without one.
Its off-topic, but after the CFA designation, what would be the second “gold standard” designation ?
Sorry let me clarify; does your broker dealer let you deliver a written financial plan to a client if ou don’t hold a financial planning designation?
I would say it depends on your career path. If your working as an Advisor, then CFP and TEP.