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 Somerset 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 in Somerset County

The next big decision is what type of Somerset County financial planner to hire. Among Certified Financial Planners, the industry gold standard, there are three types of compensation models that 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, wealth 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 a Somerset 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.

Choosing a CFP® Who Is A Fiduciary Financial Advisor

Working with a Certified Financial Planner who is a fiduciary financial advisor offers several benefits. When considering Somerset County, NJ specifically, there are unique local financial landscapes and regulations that can further emphasize these benefits. Here’s why it’s important to work with a CFP® who is a fiduciary in this region:

• Duty to Act in Client’s Best Interest: A fiduciary is obligated by law to act in their client’s best interests, putting the client’s needs ahead of their own or those of their firm. This commitment can give clients peace of mind that their interests are being prioritized.
• Reduced Conflicts of Interest: CFP®s operating as fiduciaries must disclose any conflicts of interest and are typically less incentivized to recommend investment products based solely on commissions or other incentives.
• Holistic Financial Planning: Certified Financial Planners are trained to approach clients’ finances holistically. This includes everything from investment planning to estate planning, tax strategies, retirement planning, and more.
• Expertise and Continuing Education: To become a CFP®, individuals must meet strict education and experience requirements. They must also pass a rigorous examination and adhere to continuing education requirements, ensuring they remain updated on current financial trends and strategies.
• Local Knowledge: For residents of Somerset County, a local CFP® might have a better grasp of the state’s tax codes, real estate market, and other region-specific financial nuances, helping tailor strategies that align with local realities.
• Trust and Professionalism: Working with a CFP® who is a fiduciary tends to foster trust. Their commitment to maintaining ethical standards and acting in the client’s best interest is foundational to their professional code.
• Potential for Better Financial Outcomes: Though no planner can guarantee specific returns or outcomes, a fiduciary’s duty to put the client first and their comprehensive approach may lead to strategies that are more in line with a client’s goals and risk tolerance.
• Legal Recourse: In the unlikely event that something goes wrong, clients might have more legal recourse when working with a fiduciary because of the higher standard of care they are legally bound to provide.
• Transparency: Fiduciaries are typically more transparent about their fee structures. Whether they charge a flat fee, an hourly rate, or a percentage of assets under management, clients often find it easier to understand the cost associated with their services.

For residents of Somerset County, NJ, working with a CFP® who is also a fiduciary can provide peace of mind, potential for better financial outcomes, and the assurance that they’re receiving a high standard of professional care. Always conduct thorough research and due diligence when selecting a financial professional to ensure they align with your individual needs and goals.

Contact a Virtual Retirement Planner Today

If you live in Somerset County, NJ, and are near or in retirement, hiring a Somerset County Certified Financial Planner you can trust is important. Zynergy Retirement offers virtual retirement services for our Somerset County, NJ clients. 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 Somerset County, NJ

Somerset County, NJ, is a prosperous and diverse county located in central New Jersey. With a population of over 330,000 people, the county offers a mix of urban, suburban, and rural communities, providing a range of lifestyles and amenities. Somerset County is known for its beautiful countryside, rolling hills, and farmland, which make it a popular destination for hiking, biking, and outdoor activities. The county is also home to several historic sites, including the Jacobus Vanderveer House and the historic Rockingham House. The county offers a range of cultural attractions, including theaters, museums, and art galleries. The county also has the Somerset Patriots minor league baseball team and several top-rated golf courses. Somerset County has a strong economy supported by a mix of small businesses and major corporations, including several pharmaceutical companies, financial institutions, and technology firms. The county also has several top-rated schools and healthcare facilities, including Robert Wood Johnson University Hospital.

Overall, Somerset County offers a unique blend of natural beauty, history, and culture, making it a great place to live, work, and visit. Its convenient location between New York City and Philadelphia and its easy access to major highways and airports make it a desirable location for businesses and residents alike.