OldShooter
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
A clever post from another thread:
First, "Financial Advisor" is an imprecise term. Anyone with $15 of headroom on a credit card can go to vistaprint.com and make him/herself a Financial Advisor with nice business cards. "Financial Planner?" Same deal. "Wealth Manager?' Same.
"Investment Advisor" can be made a little more definitive when written as "Registered Investment Advisor." This has legal teeth.
Where IMO it gets sloppy is when we don't clearly describe an advisor who is involved with the client's entire financial life. Not just investments but life insurance planning, estate planning, educational savings planning (i.e., 529s); the whole enchilada. IMO this is an important role for the majority of people, but probably best purchased on an hourly or flat rate basis. If I use the term "FA" for this role, then it makes no sense to also call the people at the brokerage houses FAs. They are, at best, investment advisors. Sure they may contribute advice in other areas of the client's life but at the bottom, that is not their role.
CFPs aspire to be the broad kind of advisor, not just investment advisors, but many de facto function simply as investment advisors.
Then there is the notion of fiduciaries. "Registered Investment Advisor" firms are legally fiduciaries as are their reps, "Investment Advisor Representatives (IARs)." CFPs are not fiduciaries by virtue of their having purchased this designation from a private company. (There is a lot of misinformation out there on this.) A CFP may be and often is, a fiduciary by virtue of his/her employment by a Registered Investment Advisor, but a CFP employed by a brokerage house as a registered representative is not.
So ... whats the point? I think we confuse new people, and even ourselves, by using imprecise language when we talk about these roles. So I suggest that we should try to do a little better. That's all.
I am offering sort of an editorial I guess. I think people here and elsewhere are often sloppy in writing and thinking about advisors and roles.... everyone here likes: ... Saying not so great things about FA's.
First, "Financial Advisor" is an imprecise term. Anyone with $15 of headroom on a credit card can go to vistaprint.com and make him/herself a Financial Advisor with nice business cards. "Financial Planner?" Same deal. "Wealth Manager?' Same.
"Investment Advisor" can be made a little more definitive when written as "Registered Investment Advisor." This has legal teeth.
Where IMO it gets sloppy is when we don't clearly describe an advisor who is involved with the client's entire financial life. Not just investments but life insurance planning, estate planning, educational savings planning (i.e., 529s); the whole enchilada. IMO this is an important role for the majority of people, but probably best purchased on an hourly or flat rate basis. If I use the term "FA" for this role, then it makes no sense to also call the people at the brokerage houses FAs. They are, at best, investment advisors. Sure they may contribute advice in other areas of the client's life but at the bottom, that is not their role.
CFPs aspire to be the broad kind of advisor, not just investment advisors, but many de facto function simply as investment advisors.
Then there is the notion of fiduciaries. "Registered Investment Advisor" firms are legally fiduciaries as are their reps, "Investment Advisor Representatives (IARs)." CFPs are not fiduciaries by virtue of their having purchased this designation from a private company. (There is a lot of misinformation out there on this.) A CFP may be and often is, a fiduciary by virtue of his/her employment by a Registered Investment Advisor, but a CFP employed by a brokerage house as a registered representative is not.
So ... whats the point? I think we confuse new people, and even ourselves, by using imprecise language when we talk about these roles. So I suggest that we should try to do a little better. That's all.