In the cover story “Reassessing Risk” by Olivia Mellan, Bill discusses his views on risk tolerance:

“My experience is that many people’s tolerance is directly correlated with recent market performance, so we shy away from questionnaires. I’m also wary of the way people can misjudge odds due to things like familiarity bias or the structure of questions.”

…

“We then discuss with clients how that [performed] under different market conditions, and look for their wince point to gauge whether their tolerance is lower than their capacity. If their tolerance is lower, we’ll lower the max equity exposure.”

Click here to read the entire story on InvestmentAdvisor.com.

The following is Will’s recent letter to our clients announcing his achievement.

When I joined Financial Symmetry a little over three years ago, I came in with a broad goal of using my extensive experience in accounting and taxation to help others achieve their financial objectives.  It soon became apparent to me, however, that having the CERTIFIED FINANCIAL PLANNER™ designation would enhance my hard earned skills and allow me to better serve our clients.  I am proud to announce that upon completion of an intensive preparation course and diligent self study, I successfully passed the comprehensive national CFP® exam in July.  In the months following I completed the remaining requirements to earn the CFP® designation and now possess the necessary credentials to move into a primary financial advisor role.

To earn the CERTIFIED FINANCIAL PLANNER™ designation, candidates must complete what the Board of Standards refers to as the “4 E’s”:

• Education
• Examination
• Experience
• Ethics

In addition to earning a bachelor’s degree, completing a board certified education program, passing the exam, and adhering to a strict code of ethics, candidates must also have completed three years of relevant work experience in an industry related field.  As a licensed Certified Public Accountant I was automatically eligible to apply for the CFP® Certification Examination in lieu of the education requirement.  Thirty hours of continuing education every two years is also required in order to maintain an active CFP® license.

Being part of the team here at Financial Symmetry has enabled me to build upon my experience as a partner in a local CPA firm.  Through working on plan development, personalized investment analysis, and implementing strategies in our high-level client service model, I have added the essential knowledge and skills to move into this new role with our firm.  I look forward to the new challenges and responsibilities that this opportunity presents.

For a complimentary initial consultation with Will Holt, CFP®, CPA,  please contact him at (919) 851-8200 ext. 203 or by email at wholt@financialsymmetry.com.

Can You Trust Your Financial Advisor?

Written by Chad Smith, CFP®.

” Anyone who did what Wall Street analysts advised last March has only losses after the biggest stock market rally in seven decades.

Citigroup Inc., Bank of America Corp. and more than a dozen other firms told clients to purchase European energy producers and U.S. drugmakers while selling banks and retailers, according to combined rankings compiled by Bloomberg. An investor who used $10,000 to buy companies in the highest-rated industries and bet on declines in the lowest since the advance began on March 9 lost everything and would owe as much as $6,000 to cover bearish trades, the data show… “

The lack of forward thinking by brokerage house research departments has been a constant theme in our research meetings over the years.  In fact, a central premise of our research process challenges us to explore the reasons why a source may be recommending a specific area of the market.  We attempt to evaluate the lens through which a source views the investing landscape.  This can help us understand whether they have a  motivation and/or bias that skews their opinion.  Digging deeper allows us to zero in on the “why”, which goes a long way in helping us identify opportunities for better returns.

Finding the motivation to save can be just as difficult as motivating yourself to diet and exercise. In both cases you know the outcome will be worthwhile — financial security and better health. However, taking the steps to get there is easier said than done.

If you have ever watched the show “The Biggest Loser,” you have probably heard the trainers say that being fit is not about dieting, but about making lifestyle changes that you can stick with over time. As the contestants participate in the challenge, their health gradually improves and their motivation to continue a healthy lifestyle typically increases. The hardest part is usually getting started.

The same is true with saving. While difficult at first, adopting a scheduled savings strategy and making budgeting part of your routine will increase your odds of achieving your financial goals. Identifying those goals is the first step to finding that motivation, so spend some time thinking about what you want your money to do for you. Maybe you are saving for a family vacation, your children’s education, retirement, or all of the above. Make a list prioritizing each goal and put time frames on them.

Next, work on identifying those triggers that keep you from saving money. Just as having chips and cookies in the house can derail your healthy lifestyle, so can mail order catalogs on your coffee table or even a clear view of your neighbor’s new BMW. Toss those catalogues in the recycle bin, put a limit on your Amazon or eBay habit, and start planning a savings strategy.

One of the best ways to stick to your financially fit goals is to make savings automatic. Hopefully you are already deferring money from every paycheck to your 401k. Think about increasing your deferral to put more toward your retirement goal. Then find other savings you can make automatic. Maybe you can set up a monthly transfer into your savings account, Roth IRA, or your child’s 529 plan. This strategy takes some of the work out of saving and automatically curbs spending, as your checking account appears less flush each month.

Lastly, remember that you are not alone. You probably have friends and neighbors who are also trying to stick to a financially fit lifestyle. Work together on finding low cost activities to do, and exchange tips and tricks along the way. You may also want to consider using a professional. A financial planner can help you develop a strategy specific to your needs in the same way a personal trainer can recommend the best exercises for your health and fitness goals. You can seek out a fee-only financial planner at napfa.org.

Membership in NAPFA is granted only to Fee-Only financial advisors who are paid directly by their clients. NAPFA members receive no commissions or other rewards for selling financial products. Those forms of compensation create potential conflicts of interest that may serve to undermine and advisor’s objectivity and fiduciary responsibility. It is for this reason that all NAPFA members must sign a Fiduciary Oath, in that they explicitly promise to “place the client’s interest first.”

In addition to tough standards on client-friendly compensation, NAPFA has some of the industry’s most rigorous education and training requirements. All candidates for membership are required to submit a complete comprehensive financial plan for a full-scale peer review.  Furthermore, NAPFA’s continuing education requirements exceed those of any other association of financial advisors.

“Allison Berger is a welcome addition to our organization,” said NAPFA Chair Richard Bellmer, a financial advisor in Indianapolis, IN.

“Membership in NAPFA denotes a real accomplishment for any financial advisor.  We recently surpassed 1,300 members, and are always pleased when we can strengthen our ranks with well-trained, highly-committed financial advisors.”

Bellmer continued: “Our mission for more than 20 years has been to provide comprehensive, client-centered advice to individuals and families. Our services are provided in a fee-only manner, with no sales of any products, and with full disclosure of any possible conflicts. The superior nature of this type of financial planning is widely recognized by the leaders of the financial services industry and the media.”

Read more about Fee-Only financial planning and NAPFA or call 1-800-366-2732.

Read more about Allison Berger, CFP, on the Financial Symmetry website.

Membership in NAPFA is granted only to Fee-Only financial advisors who are paid directly by their clients. NAPFA members receive no commissions or other rewards for selling financial products. Those forms of compensation create potential conflicts of interest that may serve to undermine and advisor’s objectivity and fiduciary responsibility. It is for this reason that all NAPFA members must sign a Fiduciary Oath, in that they explicitly promise to “place the client’s interest first.”

In addition to tough standards on client-friendly compensation, NAPFA has some of the industry’s most rigorous education and training requirements. All candidates for membership are reuired to submit a complete comprehensive financial plan for a full-scale peer review.  Furthermore, NAPFA’s continuing education requirements exceed those of any other association of financial advisors.

“Chad Smith is a welcome addition to our organization,” said NAPFA Chair Richard Bellmer, a financial advisor in Indianapolis, IN.

“Membership in NAPFA denotes a real accomplishment for any financial advisor.  We recently surpassed 1,300 members, and are always pleased when we can strengthen our ranks with well-trained, highly-committed financial advisors.”

Bellmer continued: “Our mission for more than 20 years has been to provide comprehensive, client-centered advice to individuals and families. Our services are provided in a fee-only manner, with no sales of any products, and with full disclosure of any possible conflicts. The superior nature of this type of financial planning is wideley recognized by the leaders of the financial services industry and the media.”

Read more about Fee-Only financial planning and NAPFA or call 1-800-366-2732.

Read more about  Chad Smith, CFP, on the Financial Symmetry website.