Understanding the credentials and roles of financial professionals is crucial for making informed decisions and ensuring your financial needs are met effectively. At Kramer Wealth Managers, we believe in empowering you with the knowledge to choose the right professionals for your financial team. Here’s a comprehensive guide to the different types of financial professionals and how to select the best fit for you.

Why Are Credentials Important?

Financial advisors are held to fiduciary standards, meaning they’re legally obligated to act in your best interest when providing financial advice. This is why credentials matter. Individuals with licenses like the Series 6 or 7 can sell investment products and provide advice related to those products but are limited in the scope of advice they can offer. They cannot charge a fee for providing investment-related advice unless they hold additional credentials.

If you encounter someone calling themselves a financial consultant, financial expert, or financial professional without these credentials, be cautious. These individuals may be offering products for profit, rather than advice tailored to your specific financial needs.

Financial Advisors and Planners

When it comes to financial advice, the titles can be confusing. The Securities and Exchange Commission (SEC) requires that anyone calling themselves a “Financial Advisor” or “Financial Planner” must have certain credentials such as the FINRA Series 65 or Series 66 licenses or professional designations like CFA (Chartered Financial Analyst) or CFP (Certified Financial Planner). These professionals must adhere to a fiduciary standard, meaning they are legally required to act in your best interest. Some professionals with these titles may only be licensed to sell products for commission rather than offer investment advice.

Financial Coaches

Financial coaches can be a valuable resource for those looking to improve their financial habits. They focus on helping with budgeting, debt management, spending behavior, and the psychology of money. However, they cannot advise on securities or investments without proper licensure, as previously mentioned. While their role is crucial for financial wellness, it’s important to be mindful of their limitations regarding investment advice.

Insurance Agents and Brokers

Insurance agents and brokers help you secure the right policies. Agents represent a single company, while brokers offer products from multiple companies. Note that insurance agents and brokers need specific licenses to sell insurance but might not be able to offer investment products unless they hold additional licenses.

Since the SEC’s Best Interest rule in 2020, insurance agents and brokers can no longer call themselves Financial Advisors or Financial Planners unless they meet fiduciary standards.  However, their knowledge remains invaluable for purchasing various insurance products. Be aware that some insurance products, like Indexed Annuities and Indexed Universal Life insurance policies, can sometimes be misrepresented as investments, which can mislead consumers. It’s essential to understand the difference between true investment products and insurance-based offerings to make informed decisions.

Estate Planning and Elder Law Attorneys

Attorneys specializing in estate planning or elder law can help with wills, trusts, Medicaid planning, and other legal matters related to aging. While any attorney can handle these issues, seeking out those who specialize in these areas is advisable. Most attorneys list their specializations on their websites.

Tax Advisors and Preparers

Tax advisors and preparers help manage your tax obligations. Surprisingly, there is no specific license required to be a tax preparer. Anyone can offer tax preparation services, but they must register with the IRS and obtain a Preparer Tax Identification Number (PTIN) if they are paid for their services. Ensure that your tax preparer signs your tax return and includes their PTIN.

For more complex tax situations, consider working with a CPA (Certified Public Accountant) or an EA (Enrolled Agent). These credentials allow professionals to represent you before the IRS, offering additional knowledge in tax matters. Some states, including California and New York, have their own regulations and requirements for tax preparers, so be aware of local standards.

Finding the Right Fit

At Kramer Wealth Managers, we believe in working with professionals who not only have the right credentials but also align with your specific needs. Don’t hesitate to ask potential financial advisors, insurance agents, attorneys, or tax preparers about their qualifications, licensure, and experience.

For our clients, we’ve curated a list of professionals who are either fluent in ASL or have experience working with Deaf clients through interpreters. We believe that working with professionals who understand your unique communication needs is essential to achieving your financial goals.

If you have any questions or need assistance in finding the right professionals for your financial team, feel free to contact us at Kramer Wealth Managers.