When meeting with my Orange County trust and estate planning clients, I have found that many are confused by the types of financial advisors to whom they have been referred, or what each profession does, so I have prepared a brief outline of experts and their scope of services for you. I work closely with many of these professionals as my clients are developing their estate plans and I hope you find this overview helpful.
Financial planners who hold CFP® certification have met education, examination, experience and ethics requirements.
Accountants provide advice on tax matters and help you prepare and submit your tax returns. All accountants who practice as Certified Public Accountants (CPAs) must be licensed by the state(s) in which they practice.
A relatively small percentage of attorneys provide financial planning services, usually specializing in estate and tax planning. A financial planner may ask an attorney to provide specific legal advice for a client, particularly in the areas of taxation or estate planning. An attorney may also be called upon to prepare the legal documents necessary to implement recommendations in areas such as wills, trust documents or business ownership planning.
Insurance agents are individuals licensed by a state or states to sell life and health and/or property and casualty insurance products. Many financial planners are licensed to sell or give advice on insurance products. Other financial planners might identify insurance needs for a client, but turn to a licensed insurance agent for recommendations about which existing insurance products best meet your needs. Independent insurance agents sell products for two or more insurance companies, while exclusive insurance agents represent only one.
Investment advisers are individuals or firms that provide securities advice for compensation as part of a regular business. They must register with the Securities and Exchange Commission (SEC) or appropriate state securities agencies, unless specifically exempted. Because financial planners often advise people on securities-based investments, many are registered as investment advisers. Investment advisers cannot sell securities products without a securities license. For that, you must use a licensed securities representative, such as a stockbroker.
Also called registered representatives, stockbrokers are licensed by the state(s) in which they practice to buy and sell securities products such as stocks, bonds and mutual funds. They generally earn commissions on all of their transactions. Stockbrokers must be registered with a company that is a member of the Financial Industry Regulatory Authority (FINRA) and pass FINRA-administered securities exams.
If you have questions about which type of financial or legal professional would be best to handle your unique planning needs, be sure to give our Orange County trust and estate planning law firm a call at (949) 260-1400.