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What is a Certified Financial Planner?

A Certified Financial Planner (CFP) is a financial advisor capable of investment and insurance/estate planning. For an advisor that wants the “CFP” designation, they must complete the CFP Board’s initial and ongoing certification requirements, which include extensive exams in the areas of financial planning, taxes, insurance, estate planning and retirement. They must also complete continuing education courses. Continue reading...

What is a Financial Advisor?

The term "Financial Advisor" applies to professionals who are compensated for helping to implement investment strategies, but it is a broad and non-specific term. There are thousands of people who are called “Financial Advisors” – but within this category are various professions with different specialties and compensation structures. There are Financial Advisors, Financial Planners, Investment Managers, Registered Investment Advisors (RIAs), and at times even CPAs, insurance agents, and lawyers are included in this umbrella term. Continue reading...

What is asset management?

Asset management is a term often reserved for the overseeing of assets on behalf of a business or for wealthy clients with significant and various assets. A financial planner, CPA, or estate attorney who is capable of assisting a client with various types of assets and their optimal arrangement for that client’s goals can be said to be in a business of asset management. Tax considerations and cash flows may be a larger consideration with asset management than with investment advising. Continue reading...

Should I pay for financial planning services?

Any professional that you work with for financial planning is going to be compensated for the work they do, but there are different ways they earn their pay. Whether it’s worth it to you is another question. If you have enough knowledge and time on your hands, and your investment portfolio is not very complicated, you may be able to manage it on your own. This can save you some money on financial advisor fees. Continue reading...

What is a Good Financial Advisor?

A good financial advisor should care as much about your investments as you do, and be personable and knowledgeable enough to make the relationship worth your time, money, and trust. Choosing a Financial Advisor is a bit like choosing a caretaker for your child: you would want someone who gives you a sense of security, who has professional references or the recommendation of a trusted friend, years of experience, is reliable and honest, can foster growth, and ideally, will care about your child almost as much as you do. Continue reading...

Do I Need a more Specialized Financial Advisor?

Some advisors have practices that focus on specific types of investments or niche markets. If your investment portfolio seems to be lacking a particular area and you are not confident that your current advisor or you yourself can take on the challenge of incorporating the changes you desire, then you may want to speak with a more specialized advisor in that particular area. Similarly, some advisors focus on specific types of clients, such as medical professionals, and if such a category suites you then you may find that your needs are best met by someone who deals with people like you most often. There are some designations and certifications that advisors can earn beyond the standard ones, which may cause them to be sought out on certain topics or investments. Continue reading...

Where do I find a good CPA?

A good CPA can be a valuable ally. You should find one who works with clients similar to you and who is easy to talk to. Taxes and accounting are a part of nearly every financial instrument and consideration that people will be confronted with in their life. It can be very beneficial to work with a CPA who can advise you properly on the issues that affect you. It can also be detrimental to place too much trust in a CPA who isn’t really an expert in the areas he claims to be. Continue reading...

What is a Certificate of Deposit?

A Certificate of Deposit, commonly referred to as a CD, is a financial product that essentially pays risk-free interest (though typically at very low rates). CDs are typically offered by banks and credit unions, and usually span in duration from one month to 5 or 10 years. They are FDIC guaranteed up to $250,000, so customers may generally consider them risk-free. But because there is very little risk to purchasing a CD, they also typically pay very low annual interest rates. Continue reading...

How many financial advisors do I need?

It’s good to have the opinion of advisors who are knowledgeable in various areas of your planning and portfolio, but for most portfolios this can be reasonably accomplished with one advisor. It’s a good idea to have one Financial Advisor who oversees all of your assets, and if the individual parts of your portfolio are of significant size, you might consider having a specialist in those fields to oversee them. Continue reading...

What does the role of a financial planner entail?

Unlock Financial Success with a Financial Planner! Discover the vital role of financial planners in achieving your life goals. Learn about their fiduciary duty, professional qualifications like the CFP®, and the fee structures they offer. Choose the right expert to secure your financial future! #FinancialPlanning Continue reading...

What are Financials Stocks?

Financial stocks are those that make up the financial sector, which encompasses banks, lenders, wire houses, and other companies that facilitate the flow of capital and debt. Real estate companies can also fall under this category. Financials tend to do well when yield curves are steep and the regulatory environment favors banks. When credit markets aren’t under strain financials tend to perform well. Continue reading...

Who is the best custodian for my investments?

Custodians are the institutions which hold your securities for you and provide some related services. Some will have various arrangements and relationships with exchanges and broker-dealers, and some may do everything in-house; such things have bearing on what your investment options are, how much equity you must have for margin, what kind of fees you pay for various services, and so on. Different custodians tend to structure their fees and services to a particular type of clientele or a particular account size. You may outgrow the custodian you have, or you may discover that there is a better, more affordable option for an account like yours. Continue reading...

Where Do I Find a Financial Advisor?

A financial advisor can be found through an online search, at events, or through the recommendation of friends. Believe it or not, while there are thousands of resources and databases, the best way to find a Financial Advisor is to ask your friends. You will need to determine a few basic criteria when looking for a Financial Advisor, such as geographical location, his or her age bracket, years of experience, frequency and medium of communication, and the amount of fees you are willing to pay. While there are thousands of resources and databases, sometimes the easiest way to find a Financial Advisor is to ask your friends. Continue reading...

What is Cash and Cash Equivalents?

Cash and cash equivalents are negotiable instruments which have a stable value and are highly liquid. Cash and Cash Equivalents is a phrase used often in the financial world. Generally money market accounts are the most used cash equivalent. They are invested in currency, and their goal is to preserve the value of the the investor’s dollars. Money market accounts are basically completely liquid, and investors can even write checks and make ATM withdrawals from their money market accounts. Continue reading...

What is Financial Liquidity?

Financial liquidity refers to the ease with which an asset can be converted to cash. Assessing financial liquidity is important on a corporation’s balance sheet, as it serves as an indication of how readily a company can pay off debts or weather a crisis. Continue reading...

What is a Registered Investment Advisor (RIA)?

An RIA is an asset manager that is registered with the SEC (in whatever state(s) they operate) and complies with certain rules and regulations. RIAs typically earn their revenues through management fees, which are almost always based as a percentage of assets under management — the average management fee is between 1% - 2%. Having management fees as a percentage of assets allows for the interest of both parties to align - as the assets grow, so does the nominal amount of fees the RIA earns. Continue reading...

Should I Trust the Opinions Expressed by Various Financial Analysts?

Studies suggest that it is not wise to put too much faith in any market analyst or commentator – but it may be wise to listen to as many of them as possible. There have been many studies surrounding the predictions of financial analysts who seek to foretell the direction of the economy, particular sectors, or even individual stocks. The studies reveal that it isn’t wise to rely on the forecasts of any one commentator or analyst. Continue reading...

How do Advisors Charge and How Much Should I Pay?

It depends. There are three commonly used fee structures: fee-only, fee-based, and commission-based, Advisors can be compensated in three ways: It’s impossible to say exactly how much you will end up paying for an advisor – it really depends on the type of advisor you decide to hire, the amount of trading or planning you will be using them for, and the size of your portfolio. In some transactions with commission-based planners, you may not see any out-of-pocket cost; their commissions are built into the products in such a way that it may not appear that there is any direct cost for their services. Continue reading...

What are Marketable Securities?

Marketable securities is a term referring to assets / securities that can be converted to cash easily, at least within a year. Examples of marketable securities are stocks, bonds, or CDs you might buy at the bank. What makes an asset a marketable security is its ability to be redeemed for cash quickly at a known market price. What is a Broker-Dealer? What is an Illiquid Security? Continue reading...

What is commodity paper?

Commodity paper is the contract for a loan which is secured by collateral in the form of a commodity held in a warehouse or in transit. This is basically a form of warehouse financing, where the inventory in storage is verified and the changing level of inventory insures a larger or smaller line of credit from the lender. In this arrangement, however, there is one agreed-upon loan and collateral amount. Continue reading...