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Have you seen the commercial where the DJ impersonates a "Real Financial Planner"? The Certified Financial Planner Board of Standards launched the Let's Make a Plan public awareness campaign to bring public awareness to these important elements in choosing a Financial Planning Professional:

  • Education
  • Written Examination
  • Professional Experience
  • Ethics
  • Enforcement of Codes of Conduct

What is a Fiduciary? NAPFA Member

A legal definition of a fiduciary is a person to whom property or power is entrusted for the benefit of another.

The National Association of Personal Financial Advisors requires that all of its advisors take a Fiduciary Oath . This oath includes a written commitment that

the advisor, or any party in which the advisor has a financial interest, does not receive any compensation or other remuneration that is contingent on any client's purchase or sale of a financial product. And the advisor does not receive a fee or other compensation from another party based on the referral of a client or the client's business.

As a Fiduciary, the financial advisor is required to act with undivided loyalty to the client. This includes disclosure of how the financial advisor is to be compensated and any corresponding conflicts of interest.

Be sure to ask any advisor you may be considering whether they are members of NAPFA and/or are they are willing to provide a written statement of compliance to the fiduciary standard. Real Financial Planning does so .

The High Cost of Investment Fees

Many investors are surprised to learn the amount they are spending for investment fees. According to a May 2013 article in Forbes magazine: "The thought of giving up 40% per year in investment return to pay for portfolio management and advice would cause most people to walk away. Yet, this is the price many people pay when they hire an investment adviser to manage a mutual fund portfolio or exchange-traded fund (ETF) portfolio. Cutting this cost by as much as two-thirds is easily done and highly recommended". You can read the entire article here.

Form ADV

The U.S. Securities and Exchange Commission suggests that before one hires an investment advisor, they should ask for and read the advisor's Form ADV. This form is used by investment advisers to register with both the Securities and Exchange Commission (SEC) and state securities authorities. The Form ADV includes a narrative brochure written in plain English that contains information such as:

  • the types of advisory services offered,
  • the adviser's fee schedule,
  • disciplinary information,
  • conflicts of interest, and
  • the educational and business background of management and key advisory personnel of the adviser.

You can find any registered advisor's most recent form ADV on the IAPD website.

Real Financial Planning's ADV brochure is here.
Sally's ADV brochure supplement is here.

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