Family Ties

How three generations of one family work together to build a financial legacy

The Name Game
Financial advisers aren’t all created equal. They each come with their own set of credentials and areas of expertise, which you can easily determine from the combination of letter abbreviations listed on their business cards. The Allen–Wynne family’s financial adviser, Alfred McIntosh, for instance, is a certified financial planner (CFP). He also has a PFP, or personal financial planning specialist designation. These certifications often determine the direction an adviser offers you. Here are some designations you should know before hiring a financial adviser.

Certified Financial Planner (CFP):
An expert in estate planning and investments who has at least three years of work experience and who has passed a comprehensive examination administered by the Certified Financial Planner Board of Standards.

Certified Investment Management Consultant (CIMC): An adviser with three years of consulting experience who has completed extensive coursework and been certified by the Institute for Investment Management Consultants.

Certified Public Accountant (CPA): An accounting and tax  professional who is licensed to do business by your state and who can represent taxpayers before the Internal Revenue Service. CPAs must pass rigorous exams before certification.

Chartered Financial Analyst (CFA): An investment adviser who has at least three years of investment management experience, and has passed examination by the Association for Investment Management and Research.

Chartered Financial Consultant (ChFC): An adviser who has passed an examination on the major financial planning areas (income tax, insurance, investments and estate planning) and has at least three years of experience.

Chartered Investment Counselor (CIC): An adviser who is certified by the Investment Counsel Association of America and also holds the CFA designation.

Chartered Life Underwriter (CLU): An adviser who specializes in life insurance and has at least three years of experience.

Commission-Only Planner: An adviser who is paid by way of commissions earned on financial products that you purchase.

Enrolled Agents: A tax professional who has passed a thorough examination and who is enrolled with the U.S. Department of Treasury to represent taxpayers before the Internal Revenue Service.

Fee-and-Commission Planner: An adviser who charges a fee for service but also receives commissions. This type of planner is sometimes referred to as a “fee-based” planner.

Fee-Only Planner: An adviser who charges a fixed hourly rate, a fixed fee, or a percentage of assets he or she manages for you.

Personal Financial Specialist (PFP or PFS): A designation for accountants who specialize in financial and retirement planning. The certification is given by the American Institute of Certified Public Accountants.
SOURCE: FINRA Investor Education Foundation

This article originally appeared in the March 2010 issue of Black Enterprise magazine.

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  • http://www.bizchelle.com Rochelle Robinson

    It’s great to see an article on generational wealth. Too often parents create new wealth and their children lose it due to financial ignorance. Kudos to the Wynne-Allen family!