-Examination: Candidates for the CFP certification must pass a rigorous two-day, 10-hour test that covers the financial planning process and includes such topics as tax planning, employee benefits and retirement planning, estate planning, investment management and insurance.
-Experience: Candidates for CFP certification must prove they have 3 years experience in financial planning before being authorized to use the CFP marks.
-Ethics: Candidates for CFP certification have their backgrounds checked by the CFP Board, and must also disclose any investigations or legal proceedings related to their professional or business conduct. The CFP Board reviews all such disclosures and investigates those statements that indicate areas of concern. Candidates must also adhere to the CFP Board's Code of Ethics and Professional Responsibility and Financial Planning Practice Standards.
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Fiduciary - A fiduciary has a legal and moral obligation to put your interests first, above all others. A fiduciary is legally required to act in your best interest—and is defined as “a person in a position of authority whom the law obligates to act solely on behalf of the person he represents and in good faith.” Fee-based investment advisors are considered fiduciaries legally and other examples of fiduciaries are executors, trustees, guardians, and officers of corporations. Fiduciaries are not permitted to seek personal benefit from their transactions with those they represent. Are all financial advisors required to be fiduciaries? The answer is, "No." As explained below, brokers are not required to act as fiduciaries—their first obligation is to their employers—and not necessarily to you.
Broker - A broker is essentially a sales agent—and rather than your interests coming first, a broker's first duty is to their firm. They can be encouraged to sell you their firm's products— not always your best buy—and not always in your best interests. You may not be offered the most economical fee/commission payment option, or compensation might not be fully disclosed. Brokers do not always clearly describe themselves as brokers but there is a big difference between a Registered Investment Advisor and the other similar titles used by brokers such as financial advisor, financial consultant, or financial planner. The nature of a broker’s compensation and his relationship with his employer might seriously diminish a client’s chance of achieving a fee-efficient, tax-efficient, well-performing portfolio. If a broker takes commissions from the funds that he buys, their decisions might be biased or self-serving. The integrity of advice might be compromised. When sales incentives or job security issues drive a broker’s buying decisions, their client’s interests might suffer. Knowing this will help you recognize who you are dealing with—a broker or a Registered Investment Advisor. Commission-based brokers do not have a fiduciary duty.
Retirement Tax Advisory Group is an RIA, a fiduciary and Hampton Scurlock is a CFP®. We are not brokers and do not work for a broker-dealer.