Chris Sumner Financial Planner in Memphis

WHAT TYPE OF FINANCIAL PLANNER IN MEMPHIS ARE YOU TALKING WITH?

Most financial planners in Memphis are investment advisers, but not all investment advisers are financial planners.

Some financial planners assess every aspect of your financial life—including saving, investments, insurance, taxes, retirement, and estate planning—and help you develop a detailed strategy or financial plan for meeting all your financial goals. Others call themselves financial planners, but they may only be able to recommend that you invest in a narrow range of products, and sometimes products that aren't securities.

Before you hire any financial advisor in Memphis, you should know exactly what services you need, what services the professional can deliver, any limitations on what they can recommend, what services you're paying for, how much those services cost, and how the adviser or planner gets paid.

Another question Chris Sumner, a fiduciary and independent investment advisor representative (IAR) with RS Financial Group in Memphis, suggest that you ask yourself some questions like; is the advisor a true advisor? This is important as an independent advisor has the right to reach across company lines and get his or her client the product or portfolio that is best for the client. An advisor that is restricted or who is limited, offers what the company he/she works for offers. This is common with the big-name Brokerage firms and captive Insurance companies. It is important to understand that when dealing with a limited range of financial products, it could have an adverse effect on your financial goals.

Does the advisor have an ADV Brochure, is also important to know. The Form ADV is the uniform form used by investment advisers to register with both the Securities and Exchange Commission (SEC) and state securities authorities. The form consists of two parts. Part 1 requires information about the investment adviser’s business, ownership, clients, employees, business practices, affiliations, and any disciplinary events of the adviser or its employees.

Beginning in 2011, Part 2 requires investment advisers to prepare narrative brochures written in plain English that contain information such as the types of advisory services offered, the adviser’s fee schedule, disciplinary information, conflicts of interest, and the educational and business background of management and key advisory personnel of the adviser. The brochure is the primary disclosure document that investment advisers provide to their clients. When filed, the brochures are available to the public on the IAPD website.

RS Financial Group believes it is important that before you hire someone in Memphis to be your investment adviser, always ask for, and read carefully, both parts of the adviser's Form ADV. Knowing what services the advisor offers will also key you in on what type of financial professional you +are speaking to in Memphis. An Investment advisor should have the ability to discuss investment relates tax issues, assess your risk tolerance and build a total plan for not only your future, but the future of your legacy as well. Risk tolerance, level of income, personal preference, capital needs, children’s future needs, your estate planning, insurance needs and sources of retirement income should all be discussed by your advisor. If these items and more are not discussed, you might need to keep looking for your advisor. Choosing the wrong advisor can mean lost years of your future.

Always ask, how does the advisor get paid and does the advisor accept fiduciary responsibility or are they held to a suitability standard? Investment Advisor Representatives are required to disclose to each client how much they will be paid and how they are paid on the plan put in place, for their client.

Deciphering the “What’s What” and “Who’s Who” of today’s complex financial services industry can be difficult, even for the most financially sophisticated members of the general investing public. Chris Sumner said the two words of importance are: fiduciary and suitability. These two words are critical in understanding the motivation behind the person offering you financial products or advice, Chris went on to say.

Recognizing the difference between the fiduciary and suitability standards may also help you to appreciate the level of care you receive from a trusted financial advisor.

BROKER

(the suitability standard):

ADVISOR

(the fiduciary standard):

“What’s What” relates to the standard of care upon which financial advice is provided to the investing public:
The fiduciary standard requires advice to be provided in the best interests of the client including the disclosure of possible conflicts of interest.
The suitability standard states that a broker only needs to check the suitability of a prospective buyer, based primarily upon financial objectives, current income level and age, in order to complete a commissionable sale of a financial product. In a way, when a broker checks the suitability of a potential buyer, they are measuring how much financial product can be sold, not the needs of the investor.

No disclosure of possible conflicts of interest is required. Common differences between the two standards involve trading commissions; for example, commissions and incentives paid by mutual fund companies back to the broker dealer. These inter-company inducements can create conflicts between the investor’s requirements and the motives of the broker. When a company suggests the purchase of a proprietary product, such as a mutual fund or an inventoried security, such as a bond, in the knowledge they will receive a direct and upfront commission, can that suggestion be relied upon to be fair for the advantage of the client?



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