First of all, congratulations! If you’ve made the decision to seek guidance from a financial professional, you have already begun to make significant progress along your journey to financial freedom. As you research who to work with, you’re likely to find that financial professionals have a wide variety of titles… The two most common are ‘Wealth Manager’ or ‘Wealth Advisor’ and ‘Financial Advisor.’ Here are their similarities, differences, and everything in between.

What’s the difference?

On a broad level, Wealth Advisors, who are also commonly referred to as Wealth Managers, are financial advisors who can help you manage your wealth on a fully integrated basis.

At InVestra, we refer to this method as Holistic Wealth Management. We bring additional tools and specialization necessary to address clients’ needs on a comprehensive basis, as those we serve require specialized planning due to having a substantial amount of assets. This includes advanced tax-efficiency planning, estate planning, business exit planning, exercising sophisticated investing strategies, and delving into more complex analyses of financial plans. Throughout the process, we refer to our private network of specialists with expertise in the realms of estate planning, corporate law, tax law, and divorce law.

It is possible, however, that professionals who refer to themselves solely as Financial Advisors can still do what Wealth Advisors / Wealth Managers do, and vice versa. To gauge whether someone has the most suitable training and expertise for YOU, look at credentials, designations, and certifications.

Credentials, designations, and certifications.

Below are some of the most common credentials you’re sure to see throughout your search for a Wealth Management Professional. Each of these credentials carries with it its own requirements for certification, including specific ethical standards.

Accredited Investment Fiduciary (AIF®)

Accredited Investment Fiduciaries® play a crucial role in the realm of wealth management, particularly for affluent individuals seeking meticulous financial stewardship. Wealth Advisors with AIF® designations act as fiduciaries in advisory relationships, prioritizing clients’ best interests. They undergo specialized training to assess and mitigate potential conflicts of interest, ensuring transparency and ethical conduct. In an era where client advocacy is paramount, Wealth Advisor, Stephanie Vokral, proudly maintains this designation (among others), to embody our firm’s commitment to excellence. The AIF® designation symbolizes respect, stewardship, and advocacy, earning admiration from our discerning clientele.

Certified Divorce Financial Analyst (CDFA®)

The role of CDFAs® is to help clients and their lawyers to understand how the financial decisions they make today will impact the client’s financial future.

After her divorce, Amber went to her financial advisor to determine how to position her assets. Together, she and her planner decided to do a total financial plan for her. During the planning session, it became apparent that during her marriage her husband had done all of the investing. He chose all the investments, made all the decisions, and invested all the money.

At the time of their divorce, he said, “Let’s just split everything 50/50. You take this half of the assets and I will take that half. Is that OK?” Amber answered, “Well, I guess that sounds pretty fair. That’s OK with me.”

Unfortunately, there was something she neither knew nor understood; neither did her lawyer, and neither did the judge. They didn’t realize that Amber would have to pay taxes on her half of the assets when she tried to access them. Her ex-husband, on the other hand, could access his half of the assets tax-free. Her 50/50 split cost her an additional $18,000 in taxes. Had Amber met with a CDFA® before the divorce was finalized, she would have been in a better position to ask for a more equitable settlement.

This has an unfortunate ending, but pre-divorce financial counseling could have helped her arrive at a settlement that was fully understood by all involved. When people think about getting a divorce, the first professional that comes to mind is an attorney. Typically Wealth Advisors – whether they’re CFPs® CDFAs® – are not considered until it’s too late.

CDFAs® help people in divorce with financial issues that will affect the rest of their lives, including:

  • Personal vs. marital property
  • Valuing and dividing property
  • Retirement assets and pensions
  • Spousal and child support
  • Splitting the house
  • Tax problems and solutions
  • Expert witness testimony
  • Tax law and financial issues affecting divorce

In divorce, we ask:

  • Where will the children live?
  • Who will pay for their education and medical treatment?
  • How do we value our property?
  • Who gets what property?
  • What tax issues must we be concerned with?
  • How do we divide retirement funds and pensions?
  • How will the lower-earning spouse survive financially?
  • What additional financial support does that person need?
  • Who gets the house?
  • What happens if a paying ex-spouse dies?

Stephanie Vokral, Wealth Advisor, CFP®, AIF®, CDFA® is here to help women answer those questions.

Certified Exit Planning Advisor (CEPA®)

Wealth advisors who maintain the CEPA® certification are much better prepared to be a resource for clients who are executives and entrepreneurs than those who do not. At InVestra, we believe positioning an individual for a successful exit is the ultimate service a wealth management professional can provide. The expertise honed from earning his credential is valuable to entrepreneurs because of the complex nature of an exit plan. A proper exit plan takes into account a combination of the owner’s personal and financial goals, the nature of the business, and the economic landscape. CEPAs® are proficient in helping business owners maximize the value of their business before exiting: this might involve improving operations, enhancing profitability, and addressing any legal or financial issues that could detract from its value. They provide detailed analyses of various exit options, such as selling to a third party, passing the business on to sons and daughters, or even merging with another company. They help you choose the path that aligns best with your objectives. Additionally, Wealth Management Professionals with this accreditation can assist with the following, and more:

  • Risk Mitigation: A CEPA® helps identify and mitigate potential risks associated with the exit, including legal, tax, and financial risks. This minimizes surprises and safeguards the owner’s wealth.
  • Tax Efficiency: They are well-versed in the intricacies of tax planning. A CEPA® can structure the exit to minimize tax liabilities and maximize the owner’s proceeds.
  • Transition Planning: Beyond the financial aspects, CEPA® advisors also assist with transition planning, ensuring a smooth handover of responsibilities, preserving the business’s legacy, and securing the owner’s retirement.
  • Peace of Mind: Having a CEPA® by your side provides peace of mind, knowing that the exit plan is well-structured, compliant with regulations, and tailored to your unique circumstances.

As a serial entrepreneur herself, Erin D. Eiras, Wealth Advisor, and Founder, chose to obtain the Certified Exit Planning Advisor® designation to help you unlock your greatest asset – your business. 

Certified Financial Planner (CFP®)

Certified Financial Planners™ are wealth management professionals who are trained to provide comprehensive financial planning services such as retirement planning, investment management, tax planning, estate planning, and insurance. The CFP® certification is widely recognized and signifies a commitment to high ethical and professional standards in the field of financial planning and is attractive to individuals seeking knowledgeable and well-rounded financial advice. By systematically prioritizing the various aspects of clients’ financial well-being, Accredited Investment Fiduciaries® instill confidence in people, offering tailored approaches to investment management that align with their unique goals and aspirations.

Stephanie Vokral, Wealth Advisor, maintains this credential in addition to several others because her life’s passion is to help clients feel empowered by helping them navigate life transitions like divorce, loss of a spouse, and/or retirement. Our on-staff Paraplanner, Natalie Barkley, also maintains this credential because she believes that financial planning is foundational in clients’ journeys to financial success and finds joy in making an impact on their lives.

“As a financial planner, I answer questions like, “How do I not run out of money when I’m older? When should I take Social Security? Can I afford to be my parents’ caregiver or is there a better way? Is my spouse’s divorce proposal a fair settlement to me?” – Stephanie Vokral, Wealth Advisor, CFP®, AIF®, CDFA®

Certified Plan Fiduciary Advisor (CPFA®)

A Certified Plan Fiduciary Advisor (CPFA®) is a wealth advisor who demonstrates expertise in working with retirement plans, including 401(k)s, 403(b)s and other defined contribution plans. Individuals who seek guidance from CPFAs® find comfort in knowing that in addition to passing the exam, these advisors must adhere to the ARA’s code of ethics. This means that when giving investment advice to retirement plans, they are legally required to follow the fiduciary standard and act only in their clients’ best interests.

Keep in mind that most financial advisors are not fiduciaries, so don’t be afraid to ask questions. It’s important to understand the differences between all these types of ‘advisors’ because a fiduciary has a higher standard to meet, an ongoing standard. Erin Eiras, Founder and President of InVestra, maintains the Certified Plan Fiduciary Advisor (CPFA®) credential (among others) for this reason. Additionally, Stephanie Vokral, Wealth Advisor, maintains the Accredited Investment Fiduciary® credential, embodying our firm’s commitment to client advocacy.

“We place a lot of emphasis on being individually accountable here for upholding high standards of integrity and being honest about everything we do. The reason act as fiduciaries in an advisor capacity is so clients know we are here to keep thier best interest front of mind.” – Erin D. Eiras, Founder

Choosing The Right Wealth Management Professional

Ultimately, choosing an advisor shouldn’t be complicated. Start by having conversations with as many individuals as possible to see who may have the potential to be the right fit. Ensure that they understand your financial goals — what you hope to accomplish by working with them — and use that to help guide your selection. In addition to looking at credentials, ask questions about their financial planning and investment philosophies! Not all financial professionals are created equally, so it’s important to work with someone who will suit your needs.

 

Ready to get started? Let’s begin to build a plan for prosperity.
Sources:

https://www.usaretirement.org/code-conduct

Important Disclosures:
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or discussed are suitable for all investors or will yield positive outcomes. To determine which type of guidance to seek, if any, from financial professionals regarding what designations they maintain may be appropriate for you, consult a legal advisor, as the information provided is not intended to be a substitute for specific individualized advice or legal advice.
Subsequently, the information is believed to be from reliable sources (see below); however, LPL Financial and InVestra Financial make no representation as to its completeness or accuracy.
Unless otherwise stated LPL Financial and the third-party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.
All investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
Securities offered through LPL Financial, Member FINRA/SIPC. InVestra Financial Services is another business name of Independent Advisor Alliance, LLC. All investment advice is offered through Independent Advisor Alliance, LLC, a registered investment adviser. Independent Advisor Alliance, LLC is a separate entity from LPL Financial.

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