Licensed by the Certified Financial Planner Board of Standards, CFPs must complete an advanced college-level course of study addressing financial planning subject areas, including insurance planning and risk management, employee benefits planning, investment planning, income tax planning, retirement planning, and estate planning. In addition, they must pass the comprehensive CFP® certification examination and obtain at least three years of full-time financial planning-related experience. To maintain the designation, CFPs must complete 30 hours of continuing education every two years.
What is a Certified Public Accountant (CPA®)?
CPAs must have achieved minimum college education requirements, minimum experience levels working in a CPA® firm environment, and the successful passing of the Uniform CPA® examination. CPAs are licensed and regulated by state boards of accountancy. In addition, in order to maintain their licenses, CPAs must complete 80 hours of continuing education every two years.
What is a fiduciary?
Under the Employee Retirement Income Security Act (ERISA), a fiduciary is any person, company, or association that renders investment advice for a fee or other compensation with respect to the funds or property of a plan, or who has the authority to do so. A fiduciary exercises discretionary authority or control over the management of a plan or the management of the disposition of its assets, or has the discretionary authority or responsibility in administering a plan. Importantly, a fiduciary is bound to always act in the best interests of the client.
What is a “fee-only” planner?
NAPFA defines a fee-only planner as someone who, in all circumstances, is compensated solely by the client, with neither the advisor nor any related party receiving compensation that is contingent on the purchase or sale of a financial product. A NAPFA member or affiliate may not receive commissions, rebates, awards, finder’s fees, bonuses, or any form of compensation from others as a result of a client’s implementation of his or her planning recommendations.
Why is fee-only compensation of critical importance?
A financial planner who has a financial stake in the course of action that he or she recommends to a client faces an inherent conflict of interest and cannot be considered objective and unbiased. This is true even if the planner truly believes that he or she has only the best interests of the client at heart. Unfortunately, the vast majority of financial advisors in the United States are sellers of financial products. Some or all of their income may be dependent upon their ability to steer their clients to a limited slice of the thousands of financial products available today. (Putting aside the conflict of interest factor, this limiting of choices in and of itself is often enough to impact the quality of the investment advice.) These advisors include stockbrokers, analysts, insurance agents, accountants, and attorneys, as well as financial planners. Many of their clients are not aware of their advisors’ dependence on selling products, or else they do not recognize its significance. NAPFA believes that many of the problems that beset Americans today in their financial affairs – including the mismanagement of debt, failure to protect retirement assets, and poor allocation of savings and investments – relate directly to the conflicts of interest that pervade the marketplace.
What is NAPFA?
NAPFA, the National Association of Personal Financial Advisors, is an organization through which fee-only financial planners can further enhance their professional skills, market their services and become part of a collective, influential voice on matters that affect them and their clients. Founded in 1983, NAPFA currently has more than 2,400 members nationwide.
What is your fee structure?
As an independent, fee-only financial planning firm, TAM Financial’s fees for comprehensive investment management are based upon a percentage of total assets under management (AUM). For accounts with a value of less than $1 million, a one percent annual fee will be charged in four equal, quarterly installments. Fees are reduced proportionally for accounts over $1 million. All of the services we provide—including tax harvesting and mitigation and small-business planning—are included in our quarterly flat fee.
Do you have a minimum account size?
While we do not have a minimum account size, our services are best suited for clients with investable assets in excess of $1 million.