Tag Archives: Advice

Financial Planning Association: An Educational Benefit

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What is the Financial Planning Association (FPA)
The Financial Planning Association is the largest membership organization dedicated to supporting personal financial planning experts in the nation. While it is generally thought of as the group for CFP® practitioners, you do not have to be a CERTIFIED FINANCIAL PLANNER™ to belong. People who support the financial planning process are able to join as well. There are about 95 chapters nationwide and tens of thousands of members. There are about 15,000 members who are a CFP® practitioner. Other types of professionals that are members are attorneys, CPAs, insurance agents, investment company representatives, and others.

Stay up to date on financial planning topics

The St. Louis, MO chapter has a monthly meeting. Each month there is a different guest speaker, usually someone local, sometimes someone from out of town. This is a good way to stay up to date on various subjects. Past topics have included; a tax update with a focus on estate planning, a health insurance reform update, economic update, and Medicare information. Future topics this year include; the banking crisis, alternative investment strategies, long-term care protection planning, tax traps in annuity planning, and Modern Portfolio Theory 2.0. I earn continuing education credit hours for attending these educational meetings, which is fortunate because I need many hours as a requirement for my designations and memberships in some organizations.

Financial education resources

This is an industry that is full of constant change so reading is a must. As a member I receive a subscription to the Journal of Financial Planning, access to research and whitepapers, and a daily retirement planning newsletter e-mail. I also receive subscriptions to Kiplinger’s, Bloomberg Businessweek, Money, and Smart Money, so that I can stay on top of what my clients are reading.

There are different reasons that I am a member of each of the professional organization to which I belong; the National Association of Personal Financial Advisors (NAPFA), the Garrett Planning Network, and the Financial Planning Association (FPA). The primary reason I belong to the Financial Planning Association is for the educational benefit to me which of course benefits my clients in the long run.

What is a NAPFA-Registered Financial Advisor?

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When I first became a NAPFA-Registered Financial Advisor I heard, more than a few times, “Congratulations… what is that?”  It wasn’t surprising, because NAPFA is a small, but important group.

What is NAPFA?

The National Association of Personal Financial Advisors (NAPFA) is a group of professional financial advisors who give advice on a Fee-Only basis, meaning no commissions or incentives.  This way the client pays for the advice (rather than the mutual fund company or the insurance company, for example) and the client feels more comfortable that they are getting objective advice.  NAPFA was started in 1983 and only has about 2,400 members.  Considering the number of financial advisors there are in the country only a very small percentage of them offer advice on a Fee-Only basis.

How do you become a NAPFA-Registered Financial Advisor?

Becoming a NAPFA-Registered Financial Advisor is a multi-step process. From the www.napfa.org website:

*You must agree to follow the NAPFA Fiduciary Oath

* Advise across Disciplines “NAPFA –Registered Financial Advisors are broadly trained to bring together and apply the separate disciplines comprising personal finance – income tax, financial position and cash flow, retirement preparation, estate planning, investments, and risk management.”

* Have a Bachelor’s degree

* Hold the CFP® or CPA/PFS designation

* Submit a comprehensive financial plan for peer review

* 60 hours of Continuing Education every two years

What does it mean to be a NAPFA member?

I recently participated in a volunteer effort called JumpStart Retire, which was a joint effort between Kiplinger Magazine and NAPFA to offer consumers the opportunity to have their retirement questions answered for free by NAPFA professionals. I answered phones for four hours and answered a lot of questions; I really enjoyed myself and got to help people as well.  What I call a “Do Good/Feel Good”.  I plan to do more of that with future NAPFA pro bono opportunities.  Also, NAPFA has free webinars from time to time for consumers as well.  To quote from www.napfa.org, NAPFA members live by three important values:

* To be the beacon for independent, objective advice for individuals and families.

*To be the champion of financial services delivered in the public interest.

* To be the standard bearer for the emerging profession of financial planning.

It’s on your To-Do. Let’s get it To-Done!

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Financial “To-Do” items

Often times, when I call someone they say to me “It’s funny that you called, because I have been meaning to call you” or “You are on my To-Do list”.  I have heard these types of comments for many years.  I have a theory about this.  My theory is that just about everyone has important financial To-Do items sitting on their To-Do list.

Generally, the items at the very top of a To-Do list are items that are urgent, like fixing a leaking roof; or they have a looming deadline, like buying a birthday gift.  Whereas, the financial To-Dos, such as “what should I do about college planning?”, have a tendency to rest near the top because they are important but, just can’t quite seem to get all the way to the top of the list because their deadline isn’t just around the corner.   Usually something has to happen to nudge that To-Do higher on the list, hopefully it isn’t the fact that college suddenly has a looming deadline.

The definition of “To-Done”

When it is time for you to go to the dentist, you put that on your To-Do list.  Once you have seen the dentist, you check it off – To-Done!  Does that mean that you never go see the dentist again?  Of course not.   When it is time for you to set your next appointment, you will put it on the To-Do list again.  The same holds true for financial planning – it isn’t a one and done type of thing.  While there are a few financial To-Do items that you do once and forget it, most financial topics need to be reviewed on a periodic basis.  For example, portfolios need to be rebalanced, employee benefits have annual enrollment periods, taxes are filed once a year, etc.

There are a variety of reasons people don’t tackle their financial To-Dos.  Many people lack either the time, confidence, or desire to handle their finances, for those people, professional advisors are a good solution.  And for others, who want to tackle some of this on their own, I hope to provide some simple To-Dos within some of my blog posts because I find it very encouraging as a financial advisor when I find consumers who have an interest in financial planning.  I hope that these posts are of help to consumers that are looking for assistance from an advisor as well as consumers that are looking to manage their own financial affairs.