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What is a CERTIFIED FINANCIAL PLANNER™ professional?

As you search for a financial planner, you'll come across individuals with a wide variety of experience and professional designations. What does all that experience and education really mean? How can you be sure that a planner will be competent and look out for your interests?

Anyone can use the title “financial planner”, but those that have earned the CERTIFIED FINANCIAL PLANNER™ certification can display the CFP® trademarks. A CFP® professional has a demonstrated level of technical knowledge and experience in the field of financial planning, and adheres to a code of ethics that requires him or her to put your interests above their own. Both Kevin M. Young and Sabine Nooteboom of Young Wealth Management are CERTIFIED FINANCIAL PLANNER™ professionals.

To become a CERTIFIED FINANCIAL PLANNER™ professional, an individual must meet the following standards:

  • Education: CFP® professionals attain theoretical and practical financial planning knowledge by completing a comprehensive course of study at a college or university offering a financial planning curriculum registered with the Certified Financial Planner Board of Standards, Inc.
  • Examination: CFP® professionals must pass a comprehensive CFP Certification Examination that tests their ability to apply their financial planning knowledge to real-life situations they will encounter when working with clients. The CFP Board's exam covers the financial planning process, tax planning, employee benefits and retirement planning, estate planning, investment management and insurance.
  • Experience: CFP® professionals must have several years of experience delivering financial planning services prior to earning the CFP® mark. As a result, CFP® practitioners have demonstrated practical as well as theoretical knowledge of the financial planning process. They understand that each client has unique planning needs; they have learned to listen carefully and provide information to clients in various ways to make sure they understand all aspects of their plan.
  • Ethics: CFP® professionals agree to follow the CFP Board's Standards of Professional Conduct. These include a Code of Ethics & Professional Responsibility which requires them to uphold the principles of integrity, objectivity, competence, fairness, confidentiality, professionalism and diligence, plus Rules of Conduct that define the client/planner relationship.

Every CFP® professional must be re-certified every two years or lose the right to use the CERTIFIED FINANCIAL PLANNER™ designation. To maintain certification, a CFP® practitioner must complete a minimum of 30 hours of continuing education; two of these hours must be a review of professional ethics. This ensures that CFP® professionals stay up-to-date regarding the latest financial planning research and best practices.

How do you choose which financial advisor is right one for you?

Financial services professionals can make money in a variety of ways. Generally, people offering financial advice can be divided into two broad categories: those who make money from commissions on products sold, and those who charge a fee for their services.

Fee-only advisors usually receive either a flat fee for their services, charge a fee based on a percentage of the client's assets under management (AUM), or some combination of the two. Commission-based advisors (such as brokers and insurance agents) earn money each time they sell you a product or you make a transaction. This model gives them an incentive to encourage clients to make unnecessary trades or purchase products that aren’t best suited to their needs.

At Young Wealth Management, we are fee-only advisors. We don't sell products or earn commissions, nor do we pay or accept referral fees. Instead, we make money when our clients are satisfied with our services and chose to continue their relationship with us. Our interests are aligned with yours.

Many people aren't aware of the differences between commission-based and fee-only planning. Understanding the distinction will help you make an informed decision about the type of financial advisor you prefer.

You can learn more about fee-only advisors and how they work by visiting the NAPFA website.

What is Fiduciary?

One of the first questions you should ask when hiring a financial advisor is, “Are you a fiduciary?” Yet few people know what a fiduciary is and why it is so important to find an advisor who accepts fiduciary responsibility.

The Board of Directors, Representatives, and Financial Advisors comprising the National Association of Personal Financial Advisors (NAPFA) have adopted the following definition of fiduciary:

fi*du*ci*ar*y - A financial advisor held to a fiduciary standard occupies a position of special trust and confidence when working with a client. As a fiduciary, the financial advisor is required to act with undivided loyalty to the client. This includes disclosure of how the financial advisor is to be compensated and any corresponding conflicts of interest.

Young Wealth Management is a fiduciary advisor and a member of NAPFA. We strive to always put our client’s interests first. A fiduciary’s first allegiance must be to his client. This differs from a broker, whose allegiance is to the brokerage company first, and his customers second. Brokers currently operate under a suitability standard of care rather than a fiduciary one, which means the investments they recommend don’t necessarily have to be the best they can offer, only one among many that are suitable based on your income, assets, stage of life, risk tolerance and other factors. If the broker is recommending products that his employer is promoting, this can create a conflict of interest. By choosing a fiduciary, you know that the advisor is primarily thinking about your best interests, rather than how he can increase his income or that of the broker/dealer with whom he is affiliated.

What is Dimensional Funds Advisors?

Dimensional Fund Advisors has a unique approach to investing and an investment philosophy that we at Young Wealth Management share. Dimensional Fund Advisors offers a unique investment model which is based on the science of capital markets rather than speculation. They believe that those who strive to "beat the market" can only do so by accepting increased risk and are likely to fail to do so over the long term. Instead, by relying on a structured investment approach grounded in academic research and philosophy, Dimensional Fund Advisors is able to add value for investors. With a research-based investment strategy that was developed by Nobel Prize-winning economists, Dimensional Fund Advisors strives to increase returns by embracing state-of-the-art portfolio design that incorporate factors such as company size, relative price, and profitability that have historically improved long-term returns.

At Young Wealth Management, we invest our clients’ money in mutual funds developed by Dimensional Fund Advisors, giving them the chance to capture the opportunities the market offers. In addition, Dimensional’s investment management fees are positioned well below those of traditional active managers, which we think makes them a good choice for our clients. While Dimensional Fund Advisors were previously only available to large, institutional investors, through Young Wealth Management you can now obtain access to these funds.

We encourage you to visit the Dimensional Fund Advisors website to learn more about DFA, their investment strategy and philosophy.

Get In Touch

Young Wealth Management is based in Davis, California. We work with clients in the greater Sacramento area and throughout California to provide comprehensive financial planning and tax-related services.

We offer an initial consultation at no charge to determine how we can best serve you. If you would like more information, please call our office or fill out this form and let us know how we can assist you.

Thank you for contacting our firm. We look forward to working with you!

Young Wealth Management

502 Mace Blvd Suite 5,
Davis, CA 95618
T: (530) 231-5152 (Davis)
T: (916) 418-0375 (Sacramento)
F: (866) 222-0252
E: kevin@youngwealthmanagement.com

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