Who Is Captaining Your Ship?

By Central Coast Wealth Management
11:27 AM, Jun 10, 2020

No matter what stage in life, when making decisions ranging in scope from career moves to wine pairings, we typically don’t go it alone. Instead, we do some research, ask family and friends for their opinions, and turn to knowledgeable people to guide us toward the best choice for our personal situation. We all look to experienced leaders for advice, and when it comes to your finances, this approach should be no different.

But where do you start? The notion of putting someone else in control of your life’s work, so to speak, is uncharted territory for most people. Learning about investments, stock market swings and rebounds, and how to create long-term retirement goals can be daunting.

Finding the right person to oversee your investment portfolio means finding a person you can trust; a person who is not only going to be prepared for downward turns but also knows how to maximize the upswing; a person who doesn’t panic when there’s a drop because they have defensive measures in place to secure your investments; and a person who will educate you and be a partner in figuring out what you are missing. You also want your financial advisor to grow your wealth without having to pay out much of what you gain in fees and commissions.

According to CEO and Founder of Central Coast Wealth Management, Kurt Jackson, “Failure isn’t an option when you are talking about someone’s finances. Experimenting with the level of experience in your financial planner shouldn’t be an option either. This is where experience counts.”

What Fees Do Financial Planners Charge?

The financial planning movement became popular after World War II, and the profession of financial planners took hold. The International Association for Financial Planners (IAFP) and the College for Financial Planning was developed, and a CFP Board was later established with a mission to uphold the standard of excellence for competent and ethical personal financial planning by way of the CFP® certification.

Historically, financial advisors were paid on commission only. However, because of the fear and greed cycle that pushed investors to buy and sell at rapid paces, this translated to financial abuse of the consumer. As a result, the CFP Board pushed for more standards that would better protect and benefit the consumer, even if commission-based payments come into play.

Here are a couple of examples of payment methods that evolved as a result of those standards:

· Fee-Only Commission The most popular method of payment is referred to as fee-only. There is a set fee that can be an hourly rate, or possibly even structured fees that are based on a selection of services bundled together that will encompass your portfolio. Although this sounds like the easy route because it seems simple and straightforward, it is not always in the best interest of the client.

· Fee-Based PaymentA fee-based payment is a combination of a flat fee with the option to obtain a commission directly from products they acquire on the client’s behalf. The ability for the advisor to earn money through other commission-based vehicles allows for more access to tools giving greater overall transaction flexibility to the advisor, which in turn yields increased benefits for the client. Examples might include the receipt of a commission from the sale of an insurance-based plan or a commission from a mutual fund company for an investment on your behalf.

As a consumer, the more important question to consider might not be whether you are paying a fee-only or fee-based cost, but instead, whether you are working with a designated CFP® practitioner or a financial planner. With over 300,000 financial planners in the U.S., only a quarter of those, roughly 87,000, have the dignified distinction of being a CFP® professional. The benefits to you in hiring a CFP® professional far outweigh the differences between how they are being compensated.

Central Coast Wealth Management, located at 1104 Palm Street in San Luis Obispo, California, has the professionals who are experienced to defend and protect your financial future. When it comes to managing your fiduciary exposure and leading your wealth management strategy through all stages of your journey, knowing that your ship is being captained by an experienced CFP® professional gives you the confidence you need – the confidence in knowing you will weather any financial storm that surfaces.

Central Coast Wealth Management can be contacted through an online questionnaire or by calling 805-439-0370.

The Financial Professionals of Central Coast Wealth Management are Registered Representatives and Investment Adviser Representatives with/and offer securities and advisory services through Commonwealth Financial Network® Member FINRA/SIPC, a Registered Investment Adviser.

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