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Looking to be happier with your life and finances in 2022?
The answer may be to find professional help.
People who worked with a financial advisor were found to be almost three times happier than those who didn’t, according to a study by Herbers & Company. According to the study, predictors of happiness such as feeling fulfilled, intentional, impactful and grateful were amplified in 66% of those who worked with a financial advisor.
Additionally, those who sought professional help managing their money were happier in their relationships and communication, according to the study.
Those looking for help managing their money in the New Year have plenty of options when it comes to personal finance experts, including financial advisors, coaches, therapists, and more.
Some of these names for individual financial professions signal different types of education and regulatory oversight, while others may simply be branding. So it is important for consumers to know the difference.
“The demand for and the number of people providing personal financial advice has just skyrocketed, as has the number of designations and certifications that exist,” said Martin Seay, Certified Financial Planner and Head of Department and Associate Professor of Planning. personal financial. at Kansas State University
Here is what you need to know.
Names and titles
There are a few professional financial organizations offering certifications that keep individuals high in education, testing, continuing education, and ethics.
PCP: One of the best known is the Certified Financial Planner, offered by the PCP Board of Directors. It is considered a gold standard because it includes rigorous education and testing in many areas of financial planning such as retirement, investments, taxes, insurance, and education. CFPs are trustees, which means they must act in the best interests of their clients.
Working with a CFP is best for people with a solid financial base who are looking to build wealth, need life insurance or other products, or are looking for investment advice. Many CFPs are also registered investment advisers, who can advise on investments and manage clients’ assets.
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“You wouldn’t be able to give investment advice if they didn’t have this [RIA] designation, ”said Ashley Dixon, CFP and chief planner at Gen Y Planning, an Austin, Texas-based company that works primarily with millennials, providing financial advice and managing some client assets.
AFC / FFC: One certification that is growing in popularity is the Accredited Financial Counseling, offered by the Association for Financial Counseling and Planning Education. Some AFCs are also financial fitness coaches, a certification that helps develop additional coaching skills. The AFC program includes personal finance training, testing, continuing education, and ethics requirements.
An AFC can help you budget, pay off debt, manage lines of credit, or prepare for a financial goal like buying a home, making it an ideal choice for first-timers.
“An AFC is a lot like a coach – we’ll meet you where you are right now,” said Cait Howerton, AFC, CFP and senior planner at Facet Wealth, a registered investment advisor in Baltimore.
Working with an AFC has been a big help for Madi Ciampi, 27, and her fiancé Andrew Papineau, 27, of Providence, Rhode Island. This year, they took a close look at their finances and realized that they had some savings, but were unsure of how to achieve their goals.
Andrew Papineau, 27, and Madi Ciampi, 27, bought their first home this year in Providence, Rhode Island, with the help of a licensed financial advisor.
Additionally, Ciampi grew up with many bad financial habits, she said, and neither received any personal finance education in school.
Through her work at a non-profit organization, Ciampi met Susan Greenhalgh, a certified financial advisor who runs Mind Your Money in Rhode Island.
Greenhalgh helped the couple set structured, clear and manageable goals, and filled their knowledge gaps, according to Ciampi. Working together, the couple were able to buy a house in November, three months ahead of schedule.
“We never would have bought a house without someone walking us through the process,” Ciampi said, adding that Greenhalgh was a rock star to help the couple understand where they were coming from financially, how it went. had an impact on their goals and how to think long term.
CFT: A Certified Financial Therapist, or CFT, is trained by the Financial Therapy Association. Financial therapy combines mental health and personal finances, making it ideal for people who face behavioral or emotional barriers that impact how they use or manage their money.
“It’s not so much about technical advice as it is about helping people get over their perception of money,” Seay said.
Find the right solution for your needs
Certainly, there are people who will give personal financial advice or qualify as a planner or coach without having any training. Whatever title a person uses, it’s important to educate yourself and research their education, background, and any registrations or certifications they hold.
“We encourage consumers to look for someone who is engaged enough in the profession to earn a designation,” said Alan Moore, CFP and co-founder of the XY Planning Network located in Bozeman, MT.
There are also limitations associated with the various certifications; for example, a CFT, AFC or FFC cannot give investment advice unless it is also a registered investment adviser.
“If you are not a RIA, there is no oversight or regulation of what you do, and that creates potential challenges for consumers,” Moore said, adding that consumers can use the Broker Check. Financial Industry Regulatory Authority to find this information. .
If you’re ready to start talking about investing or need help making decisions about different retirement accounts, a registered CFP may be a better choice, said Adriane Ross of Clear Insight Financial Planning in Spokane, Washington.
Ross continued her CFP after earning an AFC to get more technical training and be able to work with clients in more areas of personal finance, she said.
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