Independence and Your Finances By Caroline Wetzel, CFP®


reedom and independence are important to us as Americans. As we celebrate these ideals this July 4, recognize that not all fi nancial profession- als provide you freedom of choice when it comes to your fi nancial options, nor do they necessarily provide you independent advice that is in your best interest.


F While many people call themselves


“fi nancial professionals,” far fewer have the training, experience, and integrity necessary to advise you on your fi nances. You or someone you know may have even encountered a fi nancial professional who gave bad advice or took advantage of you and your fi nancial situation.


Protect your fi nances today and every


day through accurate information and de- liberate action. Following are three things you need to know when it comes to select- ing the right fi nancial professional for you.


Only Some Financial Firms Are Obligated to Always Work in Your Best Interest


All you need to do is search the internet or tune in to your favorite podcast and you are likely inundated with a dizzying array of companies that hold themselves out as ideal fi rms to advise you on your fi nances.


Quiet the noise with accurate infor- mation: Only one type of fi nancial fi rm, a Registered Investment Advisor (RIA), is ob- ligated to always act in your best interest. RIAs are organizations that have allegiance only to the clients that they serve. They are regulated on the state and/or federal levels and are bound by law to act as fi duciaries to their clients.


Typically, RIAs provide highly cus-


tomized fi nancial advice to individuals, families, and organizations and manage investments that often partner with custodi- ans, or banks, that hold clients’ securities. While the RIAs direct trades in the clients’ accounts at the custodians, clients experi- ence peace of mind that there is some separation between the RIA professionals that advise them on their fi nances and the institution that safeguards their assets.


Only Some Financial Professionals Are Obligated to Always Work in Your Best Interest


At your last professional networking event or social engagement, your head may have been spinning after listening to so many people introduce themselves as fi nancial services professionals. The titles they carry may have sounded impressive, too, from Vice President to Wealth Manager, and the organizations they represent may be widely recognized institutions such as banks, in- vestment fi rms, or insurance companies.


However, when it comes to advising


you on your fi nances, professional titles and brand names alone are not what matter most. What is essential is whether the person providing you the fi nancial advice is a


, CDFA® , AWMA®


What is essential is whether the person providing you the fi nancial


advice is a fi duciary—a professional who is bound to legal and/or ethical standards when they work with you.


fi duciary—a professional who is bound to le- gal and/or ethical standards when they work with you. A fi duciary fi nancial professional:


• Always puts your interests above their interests.


• Discloses any actual or potential confl icts of interest when working with you.


• Explains all fees associated with services provided to you.


• There are two main types of fi duciary fi nancial professionals:


1. Professionals who work for an RIA. The individuals are Investment Advisor Representatives, and they follow the fi duciary rules set for them by the state and/or federal regulators that monitor the RIAs that employ them.


2. Professionals who carry the profession designation “Certifi ed Financial Plan- ner” (CFP). CFP designees have com- pleted extra training and fulfi lled expe- rience requirements preparing them to provide advice on investments, taxes, estates, insurance, and retirement. Additionally, CFP professionals follow a strict code of ethical conduct in their practices. The Certifi ed Financial Planner designation is widely recog- nized in the fi nancial services industry and is regarded as the gold standard in delivering competent and ethical fi nancial plans.


Not All Financial Professionals Provide You Independent Advice


Some fi nancial professionals offer you fi - nancial advice with a narrow focus defi ned


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