Comparing Planners, Brokers, and Money Managers
Financial Planners assist their clients with the "big picture. " The planning process may address the following issues: insurance, investments, retirement, college expenses, budgeting, taxes, and estate. Planners will typically help in the implementation and monitoring of the plan. Compensation is by commissions or fees (or both). Some planners have earned the Certified Financial Planner or CFP designation.
Investment managers (also known as portfolio managers or money managers) work with clients by establishing an investment policy statement and make ongoing investment decisions, usually on a discretionary basis. Managers are generally compensated by fees that are based on assets under management. Investment managers must be registered by the SEC and/or state regulators (RIA).
Registered representatives assist their clients by providing research and recommendations and executing trades. Compensation is usually commission based, however, many firms offer fee based arrangements (which include management services). Brokers must be licensed by the NASD.
Some of the qualifications financial advisors may have:
MSFS: Master of Science in Financial Services
CPA: Certified Public Account
PFS: Personal Financial Specialist (applies to qualified CPA's only)
CFP: Certified Financial Planner
RIA: Registered Investment Advisor
CIS: Certified Investment Specialist
CMFC: Chartered Mutual Fund Counselor
CFS: Certified Fund Specialist
CFA: Chartered Financial Analyst
ChFC: Chartered Financial Consultant