Sherpa Wealth Strategies Financial Planner in Bend, Oregon

How to know if you need an app, financial advisor or Certified Financial Planner®

Brian Stallcop

As a young adult in the 1980s, I was interested in investing and wanted to become a millionaire. This was pre-Internet so I scoured Money magazine, called the 800 numbers listed in the ads and set up several mutual fund accounts.

In the 1990s I had a little more money and was still a dedicated do-it-yourselfer, so I opened up an online account at a discount brokerage firm. I picked my own stocks, bragged about the winners and kept silent about the losers. I had an investment portfolio but not a plan.

In 2001 I made a career change and became first an “Investment Representative” and later a “Financial Advisor.” In 2007 I became a Certified Financial Planner®. Finally, in 2011, I left behind the sales culture of my national brokerage firm and set my own course as a truly independent advocate for my clients and their wealth.

Today, the equivalent of that 800 number is an app. It seems like every twenty-something has a Robinhood account to buy and sell stocks. They think they are investors, but for the most part they are gamblers participating in a gamified corner of the market. They don’t need – or want – a financial advisor or a financial plan.

If you’re comfortable picking your own investments, you’re probably well-served with an app or an online account with one of the major discount brokers.

How to know if you need a financial advisor

When investing transitions from a fun hobby to a way to accumulate long-term wealth, you’re ready for a financial advisor. You can find them at the major brokerage firms and in the lobbies of most national banks. Though their title is “financial advisor” for the most part their job is to sell you investments. Some offer true advice, but it’s usually in the service of selling you a product. If they sell you investments but don’t take the time to read your trust or review your company benefits, you’re dealing with a financial advisor.

A financial advisor may be all you need in the years when you are first growing your career and your portfolio.

So when do you need a Certified Financial Planner®? As soon as your financial life becomes more complex.

You need a Certified Financial Planner®:

When you are trying to balance competing needs – saving for college, planning for retirement and worrying about aging parents – you need a Certified Financial Planner®.

When you own a small business or have a household income over $150,000, you need a Certified Financial Planner®.

When you worry about caring for a special needs child or how to pass your assets to a blended family, you need a Certified Financial Planner®.

If you’re trying to figure out how your portfolio of rental properties and your portfolio of mutual funds will provide enough cash flow to retire, you need a Certified Financial Planner®.

When you need a comprehensive financial plan that addresses all major areas of financial concern: retirement, investments, tax planning, college planning, insurance, annuities, estate planning and more – you need a Certified Financial Planner®.

The difference between a Certified Financial Planner® and a financial advisor

According to the CFP® Board website, Certified Financial Planners® “must meet rigorous education, examination, experience and ethical requirements. CFP® professionals are rigorously trained in 72 areas of financial expertise and must accrue thousands of hours of experience prior to earning their certification.”

CFP® professionals must pass coursework in financial planning, education planning, risk management and insurance planning, investment planning, tax planning, retirement savings and income planning, estate planning and professional conduct and regulation.

One caveat. Many financial advisors are also Certified Financial Planners®. I was one of those guys. My national brokerage firm encouraged me to become a CFP® and was very happy to have me put that on my business card. What they didn’t want me to do was to provide any advice outside of investments and life insurance. In fact, when their compliance department found an e-mail in which I offered advice outside of those areas, I was asked to stop. Eventually somebody from the home office told me I was “a square peg in a round hole.” So I went out on my own and became a truly independent advocate for my clients and their wealth.

As a Certified Financial Planner®, investments are but a small piece of the puzzle. For my clients, the portfolio review is often the shortest part of our meetings. We spend our time making plans and solving problems. We call our comprehensive process the Financial Empowerment Journey™.

So if you want to gamble in the stock market, get an app.

If you want to build a portfolio, get a financial advisor.

If you want to take a comprehensive look at how to protect your assets, reduce your taxes in life and death, and use money as a tool to reach your goals, provide a comfortable retirement and leave a legacy, you need a Certified Financial Planner®.

If you think you need a CFP® to help you develop a comprehensive financial plan that will put you on a path towards achieving all your financial goals, schedule a free consultation with us.


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