When someone is looking for a financial advisor, they may hear from friends, talk show hosts or newspaper columnists to find a NAPFA advisor. However, most people do not even know what NAPFA stands for let alone why NAPFA advisors are recommended. As a NAPFA advisor since 2009, I wanted to take this opportunity to tell you about the organization.
NAPFA, which stands for the National Association of Personal Financial Advisors, is the country’s leading professional association of fee-only advisors. To be a NAPFA advisor, neither the practitioner nor the firm that the practitioner works for can receive commissions or referral fees of any kind – compensation can only come from the client. For example, while a NAPFA advisor can assist you in purchasing an annuity or a life insurance policy, they cannot receive a commission for selling that product to you.
In addition, to become a NAPFA member, one must be a Certified Financial Planner (CFP®), commit to a fee-only compensation structure and submit a sample financial plan that is reviewed by the organization for competency and comprehensiveness.
Every year, NAPFA advisors are required to subscribe to a strict Code of Ethics and to take a Fiduciary Oath; agreeing to always put the clients’ interests first, to disclose conflicts of interests and do not accept commissions of any kind. It is also mandatory for NAPFA members to complete 60 hours of continuing education every 24 months, thereby ensuring that members stay up to date on laws, strategies and best practices as it relates to financial planning.
Can an advisor that receives commissions provide high-quality advice in the best interest of their clients? Yes, but the challenge for consumers is that it is difficult to tell if an advisor is committed to their best interest. NAPFA requirements are so strict that someone looking for an advisor can rely on NAPFA membership as a way to sort out advisors who have made the highest level of commitment toward removing conflicts of interest and putting the client’s interest first.
Having worked as a financial advisor for over 17 years, I have always believed that it is of paramount importance that my interests should be aligned with those of my clients. When my clients can sleep well at night because they know that I am in their corner, looking out for their best interests, then I also succeed. That is why I am proud to be a member of NAPFA and to work for a firm like Core Wealth Management.
Contact us today to begin a conversation with one of our professional financial planners that will bring you closer to achieving your personal financial objectives.