Independence and Your Finances

By Caroline Wetzel, CFP®, CDFA®, AWMA®

Freedom and independence are important to us as Americans. As we celebrate these ideals this July 4, recognize that not all fi nancial professionals 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.

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 deliberate action. Following are three things you need to know when it comes to selecting 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 information: Only one type of fi nancial fi rm, a Registered Investment Advisor (RIA), is obligated 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.

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.

Typically, RIAs provide highly customized fi nancial advice to individuals, families, and organizations and manage investments that often partner with custodians, or banks, that hold clients’ securities. While the RIAs direct trades in the clients’ accounts at the custodians, clients experience 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, investment 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

fi duciary—a professional who is bound to legal 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 Planner” (CFP). CFP designees have completed extra training and fulfi lled experience 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 recognized 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 www.NaturalNutmeg.com 27

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by the company that employs them. Other fi nancial professionals claim to provide you independent perspective when you fi rst start working with them. Over time, however, they strive to convert you to a client who purchases only fi nancial products specifi cally designed and sold by their fi rm.

If you value unbiased fi nancial advice from fi duciary professionals who have access to an array of resources to serve you, an independent RIA may be right for you.

Before working with any professional on your fi nances, be sure to do your homework. Consider taking the following steps before starting any relationship with a fi nancial professional or fi rm: • Check out the CFP website https:// www.letsmakeaplan.org/ to fi nd a CFP professional near you • Review fi nancial services regulatory agency websites to learn more about the experiences of a specifi c professional or fi rm • BrokerCheck (Financial Industry Regulatory Agency FINRA) • Investor.gov (Securities and Exchange Commission SEC database) • Ask questions to clarify the terms of the relationship, including fees • Request client references

Not every individual who holds themselves out as a “fi nancial professional” deserves to work with you on your fi nances. If you want to develop a comprehensive fi nancial plan and know that your investments are managed according to your plan, my independent, fi duciary team and I are right here, ready to chat with you. Caroline Wetzel is one of Natural Nutmeg’s 10Best Winners for Business/Life Coach. Caroline is a Certifi ed Financial PlannerTM (CFP®) and Vice President, Private Wealth Advisor with Procyon Private Wealth Partners, LLC. Procyon Private Wealth Partners, LLC and Procyon Institutional Partners, LLC (collectively “Procyon Partners”) are registered investment advisors with the U.S. Securities and Exchange Commission (“SEC”). This article is provided for informational purposes only and for the intended recipient[s] only. This article may also include opinions and forward-looking statements which may not come to pass. Information is at a point in time and subject to change. Procyon Partners does not provide tax or legal advice. https://www.procyonpartners.net. See ad on page 36.