1. What is the CFP® certification?
A Certified Financial Planner ™ Professional. A person certified by the Certified Financial Planner Board of Standards after meeting their educational, experience and continuing education requirements.
2. What is the ChFC® certification?
A Chartered Financial Consultant ®. A person who has successfully completed the financial services program and continuing education requirements at the American College.
3. What is the CLU® certification?
A Certified Life Underwriter ®. A person who has successfully completed the insurance professional program and continuing education requirements at the American College.
4. How do I check if my Financial Advisor is securities licensed?
You can look up their name in the FINRA BrokerCheck database.
5. What is FINRA?
The Financial Industry National Regulatory Authority. Formerly the National Association of Securites Dealers (NASD).
6. What is a FINRA Series 7 securities license?
A General Securities Sales license. A person licensed to sell all types of securities products with the exception of commodities and futures.
7. What is a FINRA Series 6 securities license?
A Limited Securities Sales license. A person restricted to sales of mutual funds, variable annuities and variable insurance products only.
8. What is a FINRA Series 65 license?
A securities license required by most U.S. states for individuals who act as investment advisors. The Series 65 exam, called the Uniform Investment Adviser Law Examination is administered by FINRA.
9. What is an RIA or an IAR?
A Registered Investment Advisor (RIA) or Investment Advisor Representative (IAR) of a Registered Investment Advisor. An investment advisory company or a person that works for an investment advisory company who is registered with the Securities and Exchange Commission (SEC) or a specific state to provide investment related advice.
10. What is Wealth Management?
Wealth management is a professional financial advisory service that coordinates financial planning, investment portfolio management, tax planning, estate planning, and other financial services in a comprehensive approach.
11. What is Investment Management?
An investment plan that takes into account investment time horizons, risk tolerance and management, expected returns, tax strategy, investment income, and other considerations. The plan is usually developed by a professional investment advisor.
12. What is a broker-dealer?
A person or legal entity (company) that engages in trading for its own account or placing trades for its clients. Licensed securities sales representatives are supervised by broker-dealers.
13. What is fiduciary duty?
The legal duty of an agent to act in the best interests of their client. Professional Investment Advisors (RIAs and IARs) are held to this standard while many stockbrokers are not.
14. What is an ETF?
An Exchange Traded Fund. An investment fund traded directly on a stock exchange. Shares can be traded with other market participants at any time the exchange is open. This is opposed to a mutual fund where shares are only bought and sold only after the market is closed and only by the mutual fund itself.
15. What is a REIT?
A Real Estate Investment Trust. A pooled investment vehicle that owns, and sometimes operates, real estate investments for a group of investors. Ownership is usually represented by shares in the REIT.
16. What is an Annuity?
A contract with a company, typically an insurance company, to pay out a sum at a later date based on an investment vehicle that can be variable with respect to market investments, or a fixed based on a guarantee from the annuity company.
17. What is Estate Planning?
Estate planning is an advance arrangement for the orderly management and disposition of your assets after you become incapacitated or at your passing. Usually organized and documented by an attorney who is experienced and certified in drawing up the necessary documents.
18. What is Probate?
The administration and disposition of the estate of a deceased person by the court according to a will, or, if there is no will (intestacy), by the application of law. Probate proceedings are a matter of public record.
19. What is a Trust?
A Trust is a legal agreement that establishes how a person’s assets will be managed and dispositioned in the event of their incapacitation or their passing. Trusts are typically administered outside of the courts and the probate process.
20. Why do I need Life Insurance?
Two of the most common reasons are: (1) Salary Replacement, to provide a replacement income stream for your family or other dependents while you are working in the case of your premature passing, and (2) Estate Creation, to create a legacy for your heirs, as beneficiaries, at your passing.