FAQ

It indicates that a financial planner adheres to the industry’s most demanding practice requirements, including Fee-Only compensation, and meets NAPFA’s rigorous standards, as out-lined below. We believe that, through our NAPFA-Registered Financial Advisor program, we have created the financial planning industry’s clearest message about the level of respon-sibility and care that must be exercised on behalf of each client.

A financial planner who has a financial stake in the course of action that he/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/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 number of the thousands of financial products available today. (Putting aside the conflict-of-interest factor, this limiting of choices, in and of itself, often is enough to impact the quality of the investment advice.)

These advisors include stock-brokers, 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 do not recognize its significance.
NAPFA believes that many of the problems that beset Americans today in their financial affairs – including the mis-management 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.

Of equal importance to Fee-Only compensation is an advisor’s ability to prove competence in financial matters as well as a commitment to a comprehensive approach to financial planning. We’re Known by the Standards We Keep TM “NAPFA has pioneered a set of standards of advisor education, training, and method of practice that truly serve the public interest, emphasizing objectivity, comprehensive planning, and broad training and experience.”

Competence
Unlike the professions of medicine, law, and accounting, the field of financial planning does not yet have a broadly accepted definition of superior quality. It has numerous certification programs that show that a person has been trained in certain relevant subject areas. The public deserves to have this crucial issue settled so that individuals can turn to financial advisors who have the equivalent of an MD, JD, or CPA in education, training, ethical requirements, and practice methods.
NAPFA’s requirements exceed those of any other financial industry association. The NAPFA program not only requires one of the basic educational certifications, but much more. A NAPFA-Registered Financial Advisor must submit a compre-hensive financial plan for peer review and complete continuing education in six subject areas every two years. Additionally, his/her government-mandated disclosure document (Form ADV) must be reviewed annually by an independent third party. Also, a NAPFA-Registered Financial Advisor must sign and abide by our Fiduciary Oath, a commitment to working solely in the client’s interest at all times.
NAPFA developed the Fiduciary Oath as a service to consumers. It is available to the public for use with any financial planner whether or not the planner is a NAPFA-Registered Financial Advisor.

Comprehensive Planning
NAPFA-Registered Financial Advisors are primarily engaged in providing comprehen-sive financial planning. Most of the nation’s financial advisors pay lip service to compre-hensive planning but few actually provide it. In recent years, largely because of the runaway stock market of the 1990s, the practice and public perception of financial planning tended to be overly focused on investments in general, and stocks in particular – a trend encouraged and reinforced by the fact that most providers of financial advice benefit from the sale of financial products.
As a result, many members of the public have received a painful reminder frequently forgotten: the value of investments can fall as well as rise. If they were relying on a financial advisor who was merely providing investment advice, they are probably surprised by and poorly prepared for the bear market.
Why? If an advisor doesn’t understand the client’s full picture, the quality of advice in any one area, including invest-ment advice, can suffer significantly. Competent and informed investment decisions must take into account all the other factors that comprise an investor’s financial profile, including tax, estate planning, insurance, risk tolerance, specific family circum-stances and ultimate financial goals. A truly comprehensive financial plan, therefore, is much more than investment advice. It is an all-purpose tool that enables planner and client, working together, to make better financial decisions because each individual decision is made within the context of the full picture.

In Summary
For too long, many Americans have relied on financial advisors who had improper motivations or a limited view of their responsibilities to their clients. NAPFA has pioneered a set of standards of advisor education, training, and method of practice that truly serve the public interest, emphasizing objectivity, comprehensive planning, and broad training and experience. Our goal is to set the bar high and make these standards commonplace in the practice of financial planning.

Absolutely, (unless otherwise specified) but there is a $200 differential in cost.   The incentive for non-members is that if they join within a few months after the conference the difference in the fee will be rebated to them.

Typically all conferences have choices between General Sessions and breakout sessions. Many also have roundtable discussions.   There is one session held for a NAPFA business meeting.   In addition there is lots of time spent in the exhibit hall where you get to network with people who have the cutting edge investment products, software and other services to share with you. Most would agree, however, that the best part of our conferences is the networking with like-minded professionals.    In addition to the all the education, there are usually one or two festive social events that everyone enjoys.

Most conferences offer approximately 25 credits, but you can usually buy cds and get NAPFA credit for the breakouts you missed.

Only if you enhance the client’s fact pattern to include the missing details, then make recommendations based on your analysis of the information. In other words you’ll need to expand the plan to include analysis and recommendations in all of the necessary areas.

Any individual applying for NAPFA-Registered Financial Advisor or Provisional Member status is required to submit a sample comprehensive financial plan.

NAPFA holds out to the public, including consumers who participate in our referral program, that professionals in these two membership categories are competent in all areas of financial planning. As a member of NAPFA you must offer comprehensive financial planning services. By asking peers to review your work product we can gain a higher level of comfort with your competency. This is an essential element of our membership criteria.

Yes, it’s okay to use financial planning software, but the reviewers want to see your own work contribution and input represented clearly. If the planning program you use doesn’t generate one or more of the documents we require (i.e., a net worth statement) you will need to supplement your plan with documents created in Microsoft Word, Excel, or a similar program.

Although it’s okay to let the reviewer know that your plans typically include Morningstar-type reports, please don’t include all of the reports!

Fairly detailed. We expect you to use a comprehensive approach to both discovery and recommendations in the sample plan you submit. Even if there are areas you don’t typically address, we need to see the subjects covered in your sample. The following information should be addressed:

Plan Checklist

There are several ways to be in touch with our membership.   These include

• Exhibiting at Conferences
• Advertising in either our Magazine or on our Website
• Buying the Mailing List
• Sponsoring a Session at a Conference
• Becoming the Annual National Sponsor

With members in 49 states and Canada, the National Association of Personal Financial Advisors (NAPFA) is the largest organization of Fee-Only comprehensive financial advisors. NAPFA members meet the industry’s highest standards of education, experience, and fiduciary responsibility. As Fee-Only planners, NAPFA-Registered Financial Advisors occupy a rapidly growing segment in the financial planning industry.

NAPFA believes that consumers are best served by a comprehensive approach to financial planning, delivered by competent individuals using a Fee-Only compensation model.  This position is gaining popularity among consumers, the media, and regulators alike. Not only do NAPFA-Registered Financial Advisors adhere to the strictest compensation guidelines, they also meet the industry’s highest standards for experience (three years minimum) and have earned an advanced broad-based education.

Exhibiting at conferences is THE BEST WAY TO MAKE AN IMPRESSION. You must make an investment in time in order to get to know the members personally.  Unlike a traditional broker/dealer, NAPFA members are not impacted by selling agreements and sales pressure from management.  They make decisions based on what is best for the client and, of course, a portion of that decision is dependent on the comfort level they have with your firm and its employees.

Attendance at one conference per year is not enough.   It is the personal relationship that leads to the business.  It may be advantageous to send the same representatives to our conferences, as this makes it easier for members to remember you and build a relationship.   Realize too that when a good product/service comes along NAPFA members network with each other and word spreads quickly.

Business casual is fine, no need to wear a suit all the time.

Two full days usually.   We serve breakfast, lunch and breaks in the hall.   In addition we usually have an opening night reception in the exhibit hall.  Exhibitors are invited to attend all conference functions - all educational sessions and all social events.