What Is The National Association of Person🎀al Financial Advisors (NAPFA)?

The National Association of Personal Financial Advisors (NAPFA) is a professional association for U.S.-based, fee-only financial advisors. Formed in 1983, NAPFA requirements include asking its members to adhere to the organization’s 澳洲幸运5官方开奖结果体彩网:code of ethics and take an annual 澳洲幸运5官方开奖结果体彩网:fiduciary oath. Members must provide independent, objective financial advice to their clients and uphold the highest standards in the 澳洲幸运5官方开奖结果体彩网:financial planning profession. They must earn their income from fees, not 澳洲幸运5官方开奖结果体彩网:commissions.

Understanding NAPFA

Finಞancial planners can be broadly divided into two🍒 categories:

• Companies such as LPL Financial, which are compensated with commissions from recommending specific investments to clients
• 🧸澳洲幸运5官方开奖结果体彩网:Those who💯 are compensated with a fee for providing objective investment advice, as with all members of NAPFA

NAPFA requires its members to be paid in fees, rather than commissions. This is be⛦cause an advisor who iꦦs paid in commissions has an incentive to recommend the investments for which the advisor receives the highest commissions rather than the investments that are best for the client.

By charging an hourly fee or a fee based on a percentage of the client’s 澳洲幸运5官方开奖结果体彩网:assets under management (AUM), the advisor’s incentives are aligned with the client’s incentives. NAPFA members are also prohibited from receiving referral fees for sending the client to another professional.

NAPFA’s stated values are as follows:

• To be the beacon for independent, objective financial advice for individuals and families
• To be the champion of financial services delivered in the public interest
• To be the standard bearer for the emerging profession of financial planning

Key NAPFA Policies

NAPFA has three key policy issues/positions that govern member conduct and inform its overall mission:

• Recognition and regulation of financial planning
• A uniform fiduciary standard of care
• Greater investment advisor oversight

NAPFA has additional requirements for its members. They must strive to provide objective advice and avoid giving advice in areas in which they lack expertise. They must keep all client information confidential unless the client authorizes sharing information. NAPFA members are required to earn continuing education credits to keep their knowledge and skills current.

Financial advisors who join NAPFA must be transparent in their interactions with their clients and do their best to ensure that clients understand how their money is being managed. NAPFA members are also required to act in a way that reflects positively on both NAPFA and the financial planning profession.

NAPFA Membership Standards and Requirements

NAPFA🥀 sets out four basic standards for its membe𓆉rs:

• Meet NAPFA’s definition of a fee-only financial planner
• Comply with NAPFA’s prohibition of certain ownership interests and employment relationships
• Comply with NAPFA standards and industry regulations
• Provide prompt notification of certain disciplinary and legal events

A full member of NAPFA must pay a one-time, nonrefundable $150 processing fee, as well as annual dues of $695, and meet six exacting requirements:

• Have a bachelor’s degree in any discipline from an accredited institution.
• Obtain and maintain a 澳洲幸运5官方开奖结果体彩网:certified financial planner (CFP) certification.
• Agree to follow the fiduciary oath at joining and every renewal.
• Commit to earning 60 continuing education hours in every two-year cycle. 
• Maintain the firm’s current Form ADV on the U.S. 澳洲幸运5官方开奖结果体彩网:Securities and Exchange Commission’s Investment Adviser Public Disclosure (IAPD) website for review.
• Submit a comprehensive financial plan, participate in a peer review, or submit proof of completing a CFP Capstone course.

To become a member, see NAPFA’s application process.

NAPFA Resources and Activities

NAPFA’s website provides several resources to both financial advisors and investors, 澳洲幸运5官方开奖结果ཧ体彩网:such as a “find an advisor” feature, consumer financial education resources, and guides to fee-only advisors and advisor selection. NAPFA holds member conferences that feature professional development and networking opportunities, virtual learning resources, awards, and chances to meet, interact with, and learn from other advisors.