10 Things to Consider before Selecting a Financial Advisor – By George Mentz, Esq.

1. Experience – Make sure your advisor has a      track record of success.
2. Accredited      Education (Level 2) Preferred      – Make sure your advisor has an education from a program that is      accredited.  Also, if the advisor  has a degree or diploma from a Level 2 institution that has both regional  accreditation and business accreditation, that is the best. As your advisor if he or she has successfully completed all exams of a business degree from an ACBSP or AACSB accredited program.
3. Licenses – Are they licensed with the SEC  or FINRA and do they have a record of good standing.
4. Government Professional License – Are they a lawyer or CPA.  If so, check      with the state bar association or AICPA to make sure they have a solid  record.
5. Regulatory and      Product Knowledge      – Make sure your advisor has the ability to recommend a broad array of      solutions for your wealth preservation and growth.
6. Qualifications – See if your advisor is a      member of a prestigious body such as the  CWM ® Chartered Wealth Manager Institute.  Ask if they are board certified as      an:  Accredited Financial Analyst ® or  Chartered Wealth Manger ®.   Also,      if they have a law degree and license or CPA, then they may also be  competent to provide advice on tax law and estate planning.
7. Value and      Compensation -  How will your advisor earn income from you?  Make sure they get paid for their work,      but it may be best to make sure they are not double dipping.  Some advisors will charge a fee for      advice and then also invest you in a product that also has fees.    With the ease of use of ETF Exchange  Traded Funds, make sure your advisor is providing added value.
8. Wealth Team  - Does the wealth manager have a group or      team to help you in the areas of:  Investing, Wealth Preservation, Risk and Insurance, Trusts,  Legal,  Retirement and Tax. Ask if      they have names of people they have worked with successfully.
9. Customer   Regulations – Be      sure to let your advisor know what your objectives are. Make sure they  understand your 1) suitability, 2) risk tolerance, and 3) time  horizon.  Ask the wealth      manager  to explain each of these to  you in detail.
10. Policy Statement – Make sure your wealth manager  provides you with an IPS Investment Policy Statement that outlines what  they will do for you and the limitations involved.

*No investment, legal or tax advice is intended to be given herein. Please see a licensed professional before making any important decision.

Standards for Professional Designations and Board Certifications in the United States

Certification Standards  Guide

Professional Designations in the United States and Internationally have a long history.  Legal cases such as the IBANEZ decision of the Supreme Court imply  that bone fide “board certifications” or “professional designation”  criteria includes:  1) Accredited Education, 2) Assessment, 3) Degree  4) Continuing Education and 5) Ethics/Professionalism 6) Experience.

Types of Certifications  and Accreditation Standards – Level II is the Highest

1. Certification      requiring Level 2 Accredited education and exams.       This is the highest form of educational requirements.  This education is generally preferred      for CPA licensure  and for      certifications from organizations such as the AAFM American Academy of      Financial Management.  Level 2 means  that both the college or university is accredited AND the business school      is also separately accredited by a government recognized body.  The ACBSP, AACSB or EQUIS are examples  of level 2 accreditation while education      from an ABA American Bar Association education would also be level 2.
2. Charters or Certification      requiring a college diploma and exams.  This is a  high standard but does not require Level 2 Accreditation Degree.  Thus, the degree may be from a good      school offshore but it may not be accredited by a recognized  organization.  Certifications in      this category focus on giving only exams as a path to achieving a “non      government recognized professional designation” or becoming chartered  with a credential as a financial analyst.
3. Credential requiring      only exam.  This standard is strong but does not  require a degree historically but rather a test only.  Examples are a project management      designation or a typical financial planner designation or credential.

• Note:  A degree, MBA, MSc, or credential based on a Level 2 education is more widely accepted globally than qualifications or degrees that do not maintain  ”Level 2″ Status.  Further, course credits are more easily transferrable with reciprocity from Level 2 business schools and institutions that are double accredited.

*Most State and Sovereign Governments worldwide prefer Level II Accreditation for the purposes of business school standards, top MBA programs, or becoming a CPA or Chartered Accountant. Further, Government recognized Bar Accredited Education is required for a legal education and  licenses.  Level 2 accreditation – the business school. In a Level 2 accreditation, the college or university and the business school are separately accredited, but the accounting program is not separately accredited. This level applies to a business school that is accredited by an organization recognized by the Council of Higher Education Accreditation (CHEA) as a specialized or professional accrediting organization, such as the AACSB or the Association of Collegiate Business Schools and Programs (ACBSP).

1. Experience – Make sure your advisor has a track record of success.
2. Accredited Education (Level 2) Preferred – Make sure your advisor has an education from a program that is accredited. Also, if the advisor has a degree or diploma from a Level 2 institution that has both regional accreditation and business accreditation, that is the best. You may want to ask your advisor if he or she has earned a business degree from an ACBSP or AACSB accredited program. See www.ACBSP.org
3. Licenses – Are they licensed with the SEC or FINRA and do they have a record of good standing.
4. Government Professional License – Are they a lawyer or CPA. If so, check with the state bar association or AICPA to make sure they have a solid record.
5. Regulatory and Product Knowledge – Make sure your advisor has the ability to recommend a broad array of solutions for your wealth preservation and growth.
6. Qualifications – See if your advisor is a member of a prestigious body such as the CWM ® Chartered Wealth Manager Institute. Ask if they are board certified as an: Accredited Financial Analyst ® or Chartered Wealth Manger ®. Also, if they have a law degree and license or CPA, then they may also be competent to provide advice on tax law and estate planning.
7. Value and Compensation – How will your advisor earn income from you? Make sure they get paid for their work, but it may be best to make sure they are not double dipping. Some advisors will charge a fee for advice and then also invest you in a product that also has fees. With the ease of use of ETF Exchange Traded Funds, make sure your advisor is providing added value.
8. Wealth Team – Does the wealth manager have a group or team to help you in the areas of: Investing, Wealth Preservation, Risk and Insurance, Trusts, Legal, Retirement and Tax. Ask if they have names of people they have worked with successfully.
9. Customer Regulations – Be sure to let your advisor know what your objectives are. Make sure they understand your 1) suitability, 2) risk tolerance, and 3) time horizon. Ask the wealth manager to explain each of these to you in detail.
10. Policy Statement – Make sure your wealth manager provides you with an IPS Investment Policy Statement that outlines what they will do for you and the limitations involved.

*No investment, legal or tax advice is intended to be given herein. Please see a licensed professional before making any important decision.
Source: www.AAFM.us and www.financialanalyst.org

As a wealth management consultant and professor for over a decade, it is that time again to file our taxes. With tax filings, we must document our income, expenses, deductions, exemptions, retirement contributions and so forth. Some of us must file our taxes for partnerships or corporations.

Wealth management comprises various subjects including: Economics, Banking, Investments, Risk Management, Investment/Asset Management, Estate Succession, Taxation, and Trust Planning and Retirement Planning.

Many of us simply receive W-2 and employment income and traditional company benefits primarily, but others who are self-employed or contractors are doing their best to utilize the system to declare income, pay for insurance, take mortgage deduction and so forth.

The good news is that that the tax code has become more amicable to the self employed over the last decade. Self employed individuals are able to write off or deduct more of their health care expenses while also setting aside more money pre-tax into their self directed retirement accounts.

Here are some thoughts related to Wealth Management 2012

Investments: While we are not sure what will happen with taxes going forward, several of today’s tax rates on income such as dividends and long-term capital gains are reasonable. If they go up, many people may sell out of dividend stocks or other related holdings. Dividend stocks have been particularly popular for retirees and those who don’t want CDs with the rates so low.

Thus, dividend stocks have been the alternative for income producing investments because the tax rates are at 15%. Overall, if income taxes go up on dividend stocks at this time, the hardest hit may be seniors and those who live on a fixed income.

Retirement and Education: In light of the present situation, we hope you are able to maximize your contributions to your retirement before April 15th each year. Also, setting aside money in a 529 plan is a good way to fund a child or grandchild’s education for the future. The annual gifting rules and estate and gift tax rules allow you to gift cash to others during life or at death. Therefore, now may be a good time to consider large gifts due to the generous estate & gift tax exemption for 2012.

Estates and Succession: As for estate taxes, those rates right now are the most generous ever. However, the large exemption may be reduced again to the Clinton era rates if nothing is done by Congress before 2013.

The other major estate management issues are succession documents. Do you have a valid will? Do you have health care directives? Have you considered limited powers of attorney for your financial affairs or health care affairs? Have you arranged for the guardianship of your children if something happens to you? All of these issues can be dynamic and very important?

Insurance: Other topics are risk management related. Do you have proper life, health, and home insurance? Have you considered an umbrella policy or disability policy? Again, protecting yourself and your family in this way is imperative. However, you must remember that insurance contracts have beneficiaries and that each policy can have primary beneficiaries or secondary beneficiaries. Further, these assets are not controlled by your will and the beneficiary receives regardless of what your will says. Providing the policy numbers and information to your loved ones may also be a good exercise.

Banking and Investment Accounts: Additionally, if you have bank or brokerage accounts, you should consider listing your spouse or loved one as person who receives the account upon death. TOD “Transfer on Death” and POD “Payable on Death” accounts are typical choices for your accounts and this allows a loved one to have access to cash immediately if something happens to you. Sometimes, rolling over or consolidating accounts is a great exercise so as to help create a better view of the totality of your investments.

Taxation: The IRS has a tax tips section which is interesting and resourceful. Moreover, there are many great tax software programs out there to chose from that you can use privately on your computer. Thus, with good information coming from the Treasury Department and quality software, all of us have a fair opportunity to get our tax paperwork done on time.

Economics: Keep in mind that there has been a number of economic cycles in the last 20 years in the USA and Internationally. That means that we should all keep an eye on our risk tolerance and our investing time horizon. When you are getting closer to retirement, you should be moving out of riskier investments and into more stable investments or stocks with less volatility if possible. Other related problems such as an election year and global debt crisis issues domestically and abroad are also now part of the macro-economic effects.

In the end, most people are concerned with financial security. During our earning years, all of us want to work in a labor of love, earn what we can, protect our children and retirement, and worry about taxes later. In the end, the key is doing what you want to do, and have the experts handle your legal, tax and wealth management for you.

*No investment, legal or tax advice is intended to be given herein. Please see a licensed professional before making any important decision.