When it comes to researching financial professionals, it can get a little confusing, but it all boils down to two main questions: Who does what, and how can they help me?
Whether you need help sticking to a budget, working your way out of debt or want help planning future investments, there are a variety of financial pros that can help you achieve your goals. Here’s a quick guide to point you in the right direction.
Certified Financial Planner (CFP)
“While financial planning can be done by anyone, a CFP is specifically trained to lead a financial planning process with a client to help them reach financial goals like getting on track for retirement, saving for their kids’ college, buying a house, starting a business, etc.” says Sarah Catherine Gutierrez, CFP, CRS, founder and principal of Aptus Financial. “CFPs take a holistic approach to finances, from making sure they are financially defended to helping set up a budgeting system that will be successful long term.”
But the CFP title is not to be taken lightly. To be an official CFP, a planner is required to earn at least a four-year college degree and complete a course of study in financial planning, have 30 hours of continuing education credit every two years (at least two in an ethics course) and at least three years of experience in planning, among other requirements.
“As investing becomes more commoditized, clients should look for financial planning as a cornerstone of their advisory relationship. A CFP is a signal of a commitment to financial planning from the rigor to obtain the designation,” Gutierrez says.
Not sure where to start? Soiree publishes an annual list of local CFPs.
Certified Public Accountant (CPA)
It’s that wonderful, totally un-stressful time of year when we’re all gathering documents to file taxes. A tax accountant helps make sure your returns follow tax laws and regulations, and we recommend finding one who is a CPA. In order to obtain CPA status, a tax accountant or other financial professional must have completed undergraduate coursework in accounting, passed the Uniform CPA Examination, meet experience requirements and follow a code of ethics.
Small business owners are likely BFFs with their CPA, but individuals should be, too. Working with a CPA throughout the year can help you create a plan to reach your financial goals and outcomes (and make tax season less of a headache).
Financial Advisor
So you’ve done your research. Are you ready to dive in? April Pollard, a CFP and chartered retirement planning counselor (CRPC) with Edward Jones, says not so fast.
“Anyone can buy a stock on a free trading app or read commentary and put together a solid portfolio with a bit of guidance from Google or YouTube,” Pollard says, “but when it comes to processing estate transfers, protecting your income, discussing long-term care facility costs, wealth transfer — would you know where to start?”
Advisor Alpha Advantage, termed by Vanguard, states an investor without behavioral coaching provided by an advisor has a 3% less return on average. This is the major advantage to hiring a good advisor.
But because it’s not just about the numbers, a good advisor also builds relationships with clients in order to understand priorities and reach long-term goals based on your individualized needs, especially in a volatile environment.
“The greatest value a good advisor brings to their clients is the ability to discuss the emotions tied to the movement of the market and stop emotional investing, whether the euphoria of a high in the market or the depression and overreaction to a down side.”
Credit Counselor
For those who struggle with debt management, consulting a credit counselor might be the answer. Many financial planners offer counsel on debt management, such as Aptus Financial’s money management system. But don’t get confused: Credit counselors are not debt consolidators.
You can find credit counselors through the Financial Counseling Association of America and the National Foundation for Credit Counseling.
This article first appeared in the February 2021 edition of The Work Wife.
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