Tag Archives: financial planning

Why is a Bogus Financial Planner so Difficult to Identify?

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You need to know there are real financial planners and there are bogus financial planners. The fake planners use the title to reduce sales resistance when they sell investment and insurance products. For example, a  plan may recommend a substantial purchase of insurance products. You are more likely to buy if it is recommended by the plan and not by the financial planner. What is the difference? There is no difference when the plan represents the financial interests of the planner.

Industry Regulations

There are no industry regulations that limit who can call themselves financial planners. A brand new sales rep may adopt the title to facilitate the sales of financial products. There are no tests to make this claim more valid and there are no licenses for financial planners. If you are asking why, it is because Wall Street firms also benefit from this deceptive sales tactic. The firms make more money when they make it easy for their reps to sell investment products and services. And make no mistake.  Wall Street has tremendous influence over the regulations that govern the industry.  Continue reading →

Seven Layers of Investment Fees

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Seven Layers of Investment FeesWould you believe there are seven layers of investment fees that can be deducted from your investment accounts? It would be rare to pay all seven, but four or five are fairly common. The more you know about investment fees the less likely excessive expenses will impact you.

Every dollar of investment fees is one less dollar you have for reinvestment and your future use. Long-term goals, like secure retirements, can be severely impacted by excessive expenses.  Continue reading →

Are Investors Paying too Much for Investment Services?

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Investment expenses are complex and advisors are reluctant to discuss them. They don’t want you to know what you pay in total fees because you may not buy what they are selling. And, they know you may be particularly sensitive about the fees they earn in down markets when you are incurring big losses.

If you want to know more about the expenses you pay, you will have to ask the right questions and you better obtain your advisor’s responses in writing. Documentation is a lot better than verbal information that is subject to recall and is easy to deny later. Continue reading →

VAR: Valueless at Risk

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JPMorgan Chase CEO Jamie Dimon said the firm suffered a $2 billion trading loss blaming an “egregious” failure in the firm’s risk management. JP Morgan’s $2 billion dollar blunder has its roots in something called Value at Risk (VAR) which is a measure of how much a company estimates it could lose on a portfolio of securities on 95 percent of days. It’s a model that supposedly measures the boundaries of risk in a bank, a portfolio, or a hedge fund under “normal” market conditions. Its main selling point is that it can simply express risk as a single number or dollar figure and ignore the greater complexities of financial markets. Continue reading →

More CPAs are Providing Financial Planning Services

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The AICPA announced more CPAs are beginning to offer financial planning services to their clients. This is an excellent fit due to the number of tax considerations in a financial plan.

CPAs have two major competitive advantages. First, their clients already trust them. And, trust gives them instant credibility. Second, CPA is a designation that is recognized by just about everybody. Very few people recognize the CFP® designation.

Some CPAs will look at planning as nothing more than an additional source of revenue from current client relationships. Notwithstanding its lack of recognition, other more serious CPAs will add a CFP® designation to their credentials. It’s excellent training and the designation will distinguish them from CPAs and CPA/PFS’.