ICFP FAQ Frequently Asked Questions
How are you compensated for your services?
Only after we have a firm understanding of your needs and goals, compensation for our services can take on one of these four forms:
- Fee – Fee for the engagement. This could be a flat fee or an hourly fee.
- Fee arrangement – Management fee based upon your assets.
- Commission – if there were a particular product that fit your situation, we would be able to implement a product where the product company compensates us.
- Hybrid – Combination approach
Each implementation strategy has its benefits and its draw backs. The key catalyst for making a decision is based on your situation.
What is the frequency in which financial planning engagements take place?
Financial Planning can be done on an “as needed” basis through various engagements that have a start and an end or on an ongoing basis through a financial planning retainer fee.
How often should someone have formal financial planning advice?
- Some people seek financial planning when a material life changing event has occurred or is expected to occur. Such events could be: Marriage, retirement, college planning, a death in the family, divorce, or the birth or adoption of a child.
- Sometimes, people need financial planning guidance when they are evaluating the financial merits of changing jobs, buying or selling a business, or purchasing a new home.
- Financial Planning can be extended to business owners as they seek to evaluate their current or prospective retirement plans, executive compensation, succession planning, or employee education.
- Others choose to create a retainer arrangement to have various financial planning services for their situation on an ongoing basis.
Is there a benefit to “diversifying advisors”?
Diversifying advisors may provide you insight to the different levels of service other investment professionals provide. However, this perceived diversification may result in inadequate financial planning due to a lack of knowledge of holdings elsewhere, as well as potentially unsuitable investment allocations due to the lack of knowledge of material changes to your account(s) with other institutions. The investor also may be able to save on overall investment related expenses by consolidating accounts and taking advantage of relative economies of scale.
What are some of the financial planning engagements in the different areas of wealth management?
Some engagements listed below, not limited to:
- Retirement Planning
- Retirement Income Planning
- 401(k) Review
- Stock Option Planning Analysis
- Social Security Election Planning
- Estate Planning
- Estate Tax management
- Wealth Transfer Planning
- Transfer Tax Management
- Charitable Planning
- Cash Flow Analysis
- Risk Management Planning
- Health Care Planning
- Insurance Review
- Long Term Care Insurance Review
- Life Insurance Review
- Health Insurance Review
- Disability Insurance Review
- Tax Planning
- Tax Management Strategies
- Portfolio Income Tax Review
- Investment Tax Planning
- Gift and Estate Tax Planning
- Income Tax Planning
- Business Tax Planning
- Tax Management Strategies
- Business Planning
- Retirement Plan Evaluation(s)
- Executive Compensation Planning
- Succession Planning
- Life Buy Sell
- Disability Buy Sell
- Retirement Buy Out
- Life Event Planning
- Education Expense
- Death in the family
- Birth or adoption of a child
- Financial Well-Being Review
- Changing Jobs
- Buying or Selling a Business
- Buying a new home
- Retirement Planning
What is a broker-dealer?
A broker/dealer is a company that a registered investment professional is required to affiliate with in order to buy or sell investment products on behalf of investors. The broker/dealer holds responsibility for regulatory compliance and adherence to securities laws. The Securities and Exchange Commission (SEC) delegates the supervision of financial advisors to the Financial Industry Regulatory Authority (FINRA).
What is an independent financial professional?
An independent financial professional is not an employee of an investment or financial services firm – they are an independent business owner. They have the freedom to structure their business in a manner that best serves their clients. The independent financial professional utilizes the services of the broker/dealer to process investment business, provide services such as practice management and education.
What is an independent broker-dealer?
You may be familiar with broker-dealers that are subsidiaries of conglomerates such as commercial banks, investment banks, and investment companies. An independent broker-dealer is different from such firms because they generally do not underwrite securities, they do not create research, and they do not engage in investment banking.
Why is independence important?
Being independent means we are not forced to sell proprietary products or meet sales quotas. Therefore, we are not pressured or distracted by corporate interests and can focus on what is best for you and your financial goals.
How am I connected to my investments?
Now, more than ever, a client wants ‘‘peace of mind’’ when it comes to the safety of financial assets.
A registered representative is an independent business owner who provides financial guidance to their clients and is typically paid a commission when you purchase a financial product.
An Investment Advisor Representative (IAR) is an independent business owner who provides financial guidance to their clients and is generally paid a fee for either managing assets, giving advice, or both.
A broker-dealer processes the commission business of registered representatives licensed with the firm and holds responsibility for regulatory compliance and adherence to securities laws.
A Registered Investment Adviser (RIA) processes the fee-based business of IARs licensed with the firm and holds responsibility for regulatory compliance and adherence to securities laws.
Pershing LLC, National Financial Services, LLC, and select firms provide the trade execution, clearing, custody, and other services for securities and related transactions.
Mutual funds, managed accounts, stocks, bonds, etc.
What do our designations mean?
As part of our ongoing commitment to our clients, we continually seek knowledge in our industry to be best prepared to address the needs of our clients. Click here to read about each of our members' designations.