Financial Symmetry News & Views

Posts Tagged ‘Financial Planning and Advice’

Financial Symmetry Inc. is proud to announce that Will Holt, CPA, has earned the CFP® designation. Congratulations Will!

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.

Understanding the difference between a fiduciary standard and a suitability standard could pay major dividends in a relationship with a financial professional.  Operating under the fiduciary standard requires a planner to put the client’s interest ahead of his or her own.  In other words, don’t be afraid to ask your financial advisor the motivation behind his or her recommendations.  Recently, the FPA in a combined effort with NAPFA and the CFP Board have made a big push to have the fiduciary standard applied to securities brokers that give investment advice as well.  In this msn.com article, Liz Pulliam Weston does a nice job breaking down the differences between these two words and lists some questions you might like to ask your advisor.

Can You Trust Your Financial Advisor?

Written by Chad Smith, CFP®.

Protecting What You Have

1:00 pm – 2:00 pm ET

Instructor Roseann Bove, CFP, CLU

NAPFA-Registered Financial Advisor

Your health, family, and home are important and need to be kept safe. Roseann will provide information on how you can protect the things you have through life, health and medical insurance.

Click here to register for this Webinar.

Click here to view archived Webinar sessions.

There are two primary types of client relationships in the world of financial investments.  The sales model represented by brokers versus the fiduciary model represented by Registered Investment Advisors.

The following is a good example of the pitfalls of the sales model:

CIT Debt Sold to Widows Has Fine Print Pimco Resists

Notice that FINRA, the self regulatory authority for brokers says:

“….it’s investigating whether the risks associated with the securities were adequately disclosed.”

Well here is an example of so called disclosure:

CIT Group Inc. Prospectus Supplement

It is our opinion that it is ridiculous to expect most Americans to be able to adequately interpret 72 pages of “disclosure” (and this is only the supplement to the initial disclosure document).

Yet the world of FINRA regulation provides the framework for a Prudential spokesman to proclaim:

“As with all bonds, investors choosing to sell the notes before maturity may sell them at market value to other investors and face certain risks, which are fully disclosed at the time of issue…”

In other words, buyer beware.

The inherent problems and conflicts of interest with the sales model is why we choose to operate as Registered Investment Advisors.  Our regulatory framework is the Investment Advisors Act of 1940, which requires that we act in our client’s best interest.  We believe this is the best framework for client relationships.  The SEC is responsible for supervision under the Act, and they have unfortunately been underfunded for the last several years.  We hope that will be corrected as we feel more of the public should be served by Registered Investment Advisors.

Article published on FiLife.com by Financial Symmetry’s Chad Smith, CFP.

If you haven’t noticed, budgeting is hip these days. This is thanks to the economic uncertainty caused by the stock market’s second worst bear market in the last 100 years. People’s fear of losing their jobs and significant losses in their investment accounts has shifted the importance of financial planning and knowing how to budget back into the spotlight. But there are still people resistant to both of these ideas.

Here are some common excuses, and why they can hurt your savings:

• Not Good With Numbers. It doesn’t take a mathematician to implement a budget. You just need an understanding of how much money is coming in and which directions it is flowing out. You could use an online tool or scribble down your monthly income minus your fixed bills every month to get an idea of what’s left for discretionary spending. When creating a budget worksheet, it’s important to consider 12 months of expenses in your budget, as there is often a lot of variance month to month. Using a year of spending targets also provides the framework to make corrections when you have a few months go over your budgeted amounts.
• Don’t Have Time To Budget. If you have 15 minutes every two weeks you can manage a budget. Most banks now allow you to download your spending data into budgeting software in a matter of minutes. If you can limit your spending to two accounts (checking and credit card) you will also cut down on time. Spend a few more minutes on categorization and you’ll be able to tell if you need to tighten up for the second half of the month or if you are on track with your targeted spending patterns. Conducting regular monthly reviews will go a long way in helping you to have a successful household budget.
• Buy Now. Save Later. Sound familiar? Spending now instead of later is a major roadblock to implementing a budget. This behavior will eat completely through any shell of a budget discipline you attempt to create. The danger with the “buy it now” mentality hangs on the standard of living concept. Most of us become comfortable with a certain level of spending and it’s a lot harder to lower that standard once established than it is to increase it. Don’t let bad spending habits dictate your budget decision-making.
• We Only Live Once. While this is a true statement, it amounts to a hill of beans when you actually need to access savings. As the latest economic crisis has clearly proven, a job loss can wreak financial havoc when you don’t have an emergency fund. Spending like there is no tomorrow will leave you ill-prepared if you find yourself unemployed. This is why it is imperative when setting up your spending categories to carefully consider how much will go towards your savings accounts. Setting up a monthly draft from your primary checking account is a good way to build your emergency fund while also providing a natural discipline for your spending.
• Spending Is More Fun! There is no doubt the instant gratification you get from purchasing an expensive meal out, a new big screen TV or a trip to Europe is very satisfying. But making those purchases within the parameters of a budget doesn’t drain all the fun. Budgeting tools simply help you to take control of your overspending habits. The power of budgeting comes from knowing where you stand and recognizing the next steps you should take to achieve your targets. When setting your targets, make sure you carve out the extraordinary and the semi-regular expenses that could ruin your motivation as well. Remember, delayed gratification is a budget’s best friend!