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What is a Certified Financial Planner®?

A Certified Financial Planner® has met the requirements of the Certified Financial Planner Board of Standards, Inc. in terms of education, examination, experience and ethics. A Certified Financial Planner® agrees to meet high standards of ethics in carrying out their financial planning role. There are approximately 50,000 Certified Financial Planners® in the United States.

What is an Accredited Investment Fiduciary™?

An Accredited Investment Fiduciary™ follows the standards of care established by The Foundation for Fiduciary Studies to serve as trustees and custodians of other people's money. There are only about 1,600 Accredited Investment Fiduciaries™ in the United States.

What is a Certified Divorce Financial Analyst™?

A Certified Divorce Financial Analyst™ is specially trained in analyzing the financial aspects of a divorce. CDFA™'s help clients evaluate the short and long term financial impact of a proposed divorce settlement. They also advise on financial issues related to the divorce, such as tax consequence, division of pension plans, continuing health care coverage, and many more issues. CDFA™'s work with lawyers to help clients understand the financial sense of proposed settlements. The Institute for Divorce Financial Analysts™ certifies CDFAs.

What's the difference between a fee-only, fee-based, and commission-based financial planner?

Fee-only Advisor

A fee-only financial advisor cannot receive compensation from a brokerage firm, a mutual fund company, an insurance company, or any other source besides you, the client. They represent you and your interests when giving you advice. When you think about where someone's paycheck comes from, that can give you a hint as to where they'll place their loyalty. Fee-only advisors, or fee-only financial planners, almost always operate as fiduciaries. "Fiduciary" means a person must legally give advice that is in her client's best interest.

Fee Based Financial Planner – Charges Fees as well as Earns Commission

Retirement financial planners may charge you a fee for retirement advice and retirement planning as well as earn commissions for selling you products that are part of the plan. Sometimes the financial planner will reduce the amount you pay – essentially reimbursing you with their commissions.

Commission-Only Financial Advisor

Commission-based advisors earn their money by selling stocks, bonds, mutual funds, life insurance, annuities and other investments. Most retirement financial planners working under this model are ethical and will try to keep your best interests in mind – but they may be prejudiced by higher commissions on one product or another and lean toward selling you products that may not be in your best interest.

In a commission only setting, the risk of being subject to an unethical financial advisor’s fraud could be higher. There is no charge for the financial planner's advice or guidance, and remember, that advice is worth what you paid for it.

What is an Enrolled Agent?

Enrolled Agents (EAs) are the only federally-licensed tax practitioners who both specialize in taxation and have unlimited rights to represent taxpayers before the Internal Revenue Service. These tax specialists have earned the privilege of representing taxpayers before the IRS by either passing a comprehensive three-part examination covering individual tax returns; business tax returns; and representation, practice and procedure, or through relevant experience as a former IRS employee. All candidates are subjected to a rigorous background check conducted by the IRS.

What are the differences between Enrolled Agents and other tax professionals?

The Enrolled Agent license is the most expansive license the IRS grants a tax professional. Enrolled Agents are generally unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and the IRS offices before which they may practice. Unlike attorneys and CPAs, who may or may not choose to specialize in taxes, all Enrolled Agents specialize in taxation. CPAs and attorneys are licensed by the states, but Enrolled Agents are federally licensed. While the IRS requires all preparers to obtain and maintain a valid Preparer Tax Identification Number (PTIN), Enrolled Agents have gone beyond the basic requirements and have demonstrated their expertise through testing. Enrolled Agents are required to complete many hours of continuing education each year to ensure they are up-to-date on the constantly changing tax code and must abide by a code of ethics. National Association for Enrolled Agents (NAEA) requirements for membership exceed the Internal Revenue Service’s standards: members must acquire 30 hours of CE per calendar year. As of 2018, approximately 55,000 tax practitioners are licensed as Enrolled Agents, and approximately 11,000 are members of NAEA.