Working with the right financial advisor is the single most important step you can take to ensure retirement success. Yet with so many experts, advisors, and salespeople out there, it’s difficult to know how to find the right person for the job. Zynergy Retirement Planning will break down what you need to know regarding financial planners and give you all the information you will need to make an informed decision when choosing a Certified Financial Planner you’d like to work with in Ocean County, NJ.
The Importance of Working with a Certified Financial Planner
A CFP®, Certified Financial Planner, is a financial professional that has met the rigorous qualifications of the CFP® Board of Standards. These individuals are required to take extensive coursework in the financial planning process, insurance, investments, retirement planning, tax planning and estate planning; a course load that takes nearly two years to complete. The CFP® Candidate must fulfill a 3 year experience requirement, pass a 10 hour exam and uphold an ethics oath before they are eligible to use the CFP® title. To maintain the title, CFPs® must engage in 30 hours of continuing education every two years to keep current with the constant changes in this field. That is why when it comes to working with a professional to plan for retirement, it is important to make sure they are a Certified Financial Planner.
Types of Financial Planners
The next big decision is what type of Ocean County financial planner to hire. Among Certified Financial Planners, the industry gold standard, there are three types of compensation models which may affect the type of experience you have:
- A Commission-Based Financial Planner is a type of financial professional who earns their income entirely through commissions from the sale of financial products, such as investment funds, insurance policies, and annuities. This means that their earnings are directly tied to the products they sell to their clients. As a result, their main incentive is to promote and sell these products to their clients, rather than providing objective and unbiased financial advice that prioritizes the client’s best interests.The commission-based financial planner’s behavior can be compared to that of a car salesman at a dealership who is trying to sell an expensive sports car to a customer who has expressed a need for a family-friendly vehicle that meets their budget and safety requirements. The car salesman may not necessarily have the customer’s best interests at heart, as they are more concerned with making a sale and earning a commission. In the same way, a commission-based financial planner may push financial products that may not be the best fit for their client’s needs or financial goals, solely for the sake of earning a commission.This type of sales-driven behavior can lead to a frustrating and unfulfilling experience for the client, who may end up with financial products that are not aligned with their needs, financial goals, or risk tolerance. Therefore, it is essential for individuals seeking financial advice to carefully evaluate the compensation structure of any financial professional they work with to ensure that their advisor’s incentives are aligned with their best interests.
- A Fee-Based Financial Planner is a type of financial professional who charges their clients a small fee in addition to receiving commissions from the sale of financial products. The intention of charging a fee is to demonstrate that their primary objective is not simply to sell financial products to their clients, but also to provide sound financial advice. By receiving a fee, a fee-based financial planner is expected to be more invested in their client’s success and to provide objective advice that aligns with their client’s financial goals. However, it is important to note that the majority of their compensation is still derived from commissions earned from the sale of financial products. This creates a potential conflict of interest, as their compensation is still tied to the products they sell to their clients. While a fee-based financial planner may prioritize the client’s best interests, there may still be an incentive to recommend certain financial products that offer higher commissions.To illustrate this, imagine a car salesman who directs you towards the family car you are interested in, but keeps pushing expensive features that you do not want or need. Despite the car salesman’s initial efforts to meet your needs, their motivation to sell higher-priced features still takes precedence. In the same way, a fee-based financial planner may prioritize their commission earnings over the best interests of their client, even if their fee-based compensation structure implies that they have their clients’ interests at heart.To avoid any potential conflicts of interest, it is important for individuals seeking financial advice to carefully consider the compensation structure of any financial professional they work with. Seeking the services of a fee-only financial planner, who does not earn commissions from the sale of financial products, may be a better option for individuals who want to ensure that their financial planner’s incentives are aligned with their best interests.
- A Fee-Only Financial Planner is a type of financial professional who earns their entire revenue directly from their clients. Unlike Commission-Based or Fee-Based Financial Planners, they do not receive any compensation, such as commissions or kickbacks, from the financial products they recommend or sell. This makes Fee-Only Financial Planners unique in the sense that their primary incentive is solely focused on the success of their clients and not on the sales of specific financial products. Since they do not receive any form of compensation or financial incentives from the products they recommend, Fee-Only Financial Planners can provide objective and unbiased financial advice that is tailored to their client’s specific needs and financial goals. They can provide a broad range of services, including investment management, retirement planning, tax planning, and estate planning.To draw an analogy, working with a Fee-Only Financial Planner is like buying a car from a salesman who listens to your needs, helps you choose the right car with features that fit your requirements, and ensures you get the best deal. The car salesman is not incentivized to sell a particular car model or make because of the commission they will receive. They are solely focused on ensuring their customers are satisfied with their purchase. Similarly, a Fee-Only Financial Planner is not incentivized to sell specific financial products or investments; their only goal is their client’s success. They help their clients develop a personalized financial plan that aligns with their specific financial objectives and risk tolerance. They also assist their clients in implementing their plan and provide ongoing advice and guidance to ensure they stay on track towards their financial goals.
Benefits of Choosing a Fee-Only Financial Planner
A Fee-Only CFP® is not only qualified, but they also have your best interest in mind. What exactly is it that makes a fee-only financial planner a better option for most people than the other options? We have three major reasons choosing an Ocean County fee-only financial planner is in your best interest.
- Fewer conflicts of interest. A fee-only financial planner has no incentive to pitch options or promote funds that would benefit them more than it would benefit their client. While fee-based planners can provide perfectly good service to their clients, it does open up questionable relationships between clients, planners, and investment options. You can avoid any questionable intent by working with a fee-only financial planner.
- The focus is on financial advice. Fee-only financial planners are there to provide the best financial advice, and not try to sell financial products. Providing good advice on where to put your money is good for you, which will end up being good for them too. It’s a win-win situation.
- Percentage based payment options. Most fee-only financial planners will charge a percentage of the amount of money they manage. Once again, this incentivizes a fee-only financial planner to be as efficient as possible with your money, as the returns will ultimately benefit both parties. If you make money, they make money too.
Make Sure Your Financial Planner is a Fiduciary
On top of choosing a fee-only financial planner, you should also make sure they are a fiduciary. This means they are required to act in the best interest of their client when handling retirement investments. A financial professional who is not a fiduciary has no obligation to put the needs of their clients ahead of their own.
Contact a Retirement Planner Today
If you are living in Ocean County, NJ, and are near or in retirement, it is important to hire a Ocean County Certified Financial Planner you can trust. As a fee-only CFP® and fiduciary, we build successful, productive long-term relationships with our clients through unbiased, objective financial advice. Contact Zynergy Retirement Planning today to learn more!
Retirement Planning in Ocean County, NJ
Ocean County, NJ is a beautiful coastal county located in the southern part of the state. With a population of over 600,000 people, the county is known for its long stretches of sandy beaches, quaint beach towns, and abundant natural resources.Ocean County is home to several popular beach destinations, including Seaside Heights, Point Pleasant, and Long Beach Island, where visitors can enjoy swimming, surfing, fishing, and boating. The county is also home to the Barnegat Lighthouse, one of the state’s most iconic landmarks.In addition to its coastal attractions, Ocean County offers several parks and recreational areas, including the Pine Barrens, which covers over 1.1 million acres and offers hiking, camping, and canoeing. The county is also home to several top-rated golf courses and sports facilities.The county’s strong economy is supported by a mix of small businesses and major corporations, including several healthcare providers, retail stores, and manufacturing companies. The county’s quality of life is further enhanced by its top-rated schools and healthcare facilities.Overall, Ocean County offers a relaxed coastal lifestyle with a range of natural, cultural, and recreational opportunities. Its convenient location between New York City and Philadelphia and its easy access to major highways and airports make it a popular destination for visitors and residents alike.
Popular towns in Ocean County, NJ include:
- Toms River
- Ocean Township
- Point Pleasant
- Seaside Heights
- Seaside Park
- Barnegat Township
- Beach Haven
- Ship Bottom
- Little Egg Harbor
The cost of living in Ocean County can be high, which is why it is important to hire a Ocean County Certified Financial Planner when considering your retirement.