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What You Need to Know

  • The value of financial advice is often greatest when markets are rockiest.
  • Advisors must ensure clients don’t forget the basics of taking risk and seeking reward in the markets.
  • Healthy skepticism and a long-term perspective are essential for client success.

The American College of Financial Services published a new podcast this week featuring Michael Finke, a senior leader at the college who directs the wealth management certified professional designation program, and David Blanchett, managing director and head of retirement research at Prudential Financial’s asset management business, PGIM.

During the discussion, Finke and Blanchett spotlighted the market challenges investors have experienced in 2022, with a particular focus on what they called the “spectacular decline” in the value of cryptocurrencies and related digital assets.

According to Finke and Blanchett, the crypto losses and the broader client pain suffered during 2022 offer some key lessons for financial advisors to carry into the next year. The pair emphasized how advisors must work hard to remind their clients that there is no free lunch in investing — and to combat their own feelings of “FOMO” when exciting new investment opportunities appear that seem too good to be true.

In the conversation highlights presented below, Blanchett and Finke offer up five basic finance lessons that clients (and many advisors) seem to have forgotten this year.

1. Hindsight Remains 20/20

As Blanchett pointed out, individuals are really good at spotting what they perceive to be attractive investments — but only after they go up and much of the potential profit has already been reaped by others. As it is commonly put, investors are prone to chase past performance and buy assets only after they have appreciated in value.

This hindsight bias applies to traditional assets, Blanchett said, but especially to new and emerging assets and specifically to cryptocurrencies. Prior to this year’s meltdown, investors of all stripes, from the most sophisticated to the most novice, were simply dazzled by the meteoric rise of the value of cryptocurrencies. They could not help but buy into the hype generated by celebrity endorsements and Super Bowl ads.

As Blanchett noted, many investors probably did feel some degree of uneasiness with respect to piling into cryptocurrencies that were hovering at or near record highs, but they couldn’t help chasing the possibility of magical returns.

2. Reward Only Comes From Taking Risk

“Another related lesson learned this year that will be carried into next year is the simple fact that, if you are trying to make a return above and beyond what is reasonable, you are going to be taking excessive risk in the attempt to accomplish that outcome,” Blanchett said.

As Finke and Blanchett pointed out, a huge amount of wealth has been destroyed in 2022 simply because people forgot the basic mantra of investing and life: If an opportunity seems too good to be true, it probably is.

“That’s true about crypto-type assets and also about any other asset type, for that matter,” Blanchett said. “This type of magical thinking has happened before, sadly, and it will happen again. What we have been reminded of is that opportunities for an outsized return are only possible because you are taking excess risk and because you could lose much more than you might anticipate.”

3. No Free Lunch Means No Free Lunch

Finke said that prior to the crypto crash, it was all too common to hear investors say they had found a no-risk investment opportunity that would deliver returns in the realm of 9% or 10% — for example, by investing funds in the FTX or Celsius platforms.

“When you hear something like this, your first thought should be, wait a minute: There is no free lunch in investing,” Finke said. “Another point to make is a little more subtle. You have to ask yourself, well, if this really were a true risk-free opportunity, what is stopping people from borrowing Treasurys and putting all their money in Celsius or FTX as an arbitrage opportunity?”

As Finke explains, such an investor could reliably pay back the 2% or 3% interest on the Treasurys while they are at the same time enjoying a 9% return. In other words, they could enjoy a free lunch!

“That is what we would think of as a classic arbitrage opportunity,” Finke said. “As such, there are plenty of sophisticated hedge funds and other sophisticated actors out there in the market who would have done this — but they wanted nothing to do with this approach. Why? Because they understood that you have to be taking risk in order to be compensated for risk.”

Thu, 01 Dec 2022 05:12:00 -0600 en text/html https://www.thinkadvisor.com/2022/12/01/5-basic-finance-lessons-many-clients-and-some-advisors-forgot-this-year/
Killexams : 14 Key Signs You Will Run Out of Money in Retirement

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You don't want to go broke in retirement. Despite all your preparation, however, you might discover that your retirement is going to cost more than you planned.

Take a Look Back: 2022 Year in Review
More: 5 Things You Must Do When Your Savings Reach $50,000

First and foremost, you need to become aware of the reasons that the budget you have in mind could be smaller than it needs to be. If you're panic about having enough money, check out the signs that you might not be saving enough for retirement.

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You Don't Have a Long-Term Care Plan

You could quickly run out of money in retirement if you need long-term care but didn't have a plan to pay for it. More than half of adults turning 65 today will need long-term care and about 1 in 7 will need care for more than five years, according to the Department of Health and Human Services.

If you receive care in an assisted living facility or nursing home, you'll have to shell out big bucks. The average annual cost of care in an assisted living facility was $48,612 in 2019, according to the Genworth Cost of Care Survey. The annual cost of a private room in a nursing home is over $102,000.

"Even the wealthiest people are at risk if they have a lot of long-term care expenses," said Dave Littell, professor emeritus of taxation at The American College.

Take Our Poll: Do You Think You Will Be Able To Retire at Age 65?

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What To Do

You can use several strategies to be financially prepared for long-term care, Littell said. Options include getting a long-term-care insurance policy or hybrid life insurance policy that will pay out if you have a long-term-care event. Another option is a longevity annuity, Littell said.

This is an insurance product that requires a lump-sum investment and will provide a steady stream of retirement income. But, you have to wait several years or until a certain age to start receiving your payout. As a result, "you can't time it exactly with a long-term care need," Littell said. Ideally, you should meet with a financial planner who specializes in long-term care planning to help you devise a strategy, he said.

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You Underestimated Your Life Expectancy

Your retirement could easily be more expensive than you thought if you live a lot longer than you expected you would. About 1 in 4 65-year-olds today will live to age 90, according to the Social Security Administration.

If you saved enough to cover expenses for 20 years in retirement but end up living for 30 years in retirement, you'll have to find a way to stretch your savings for another 10 years.

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What To Do

Littell recommended using the life expectancy calculator at Livingto100.com to get an estimate of how long you will live based on your health and family history. To reduce the risk of outliving your savings, you shouldn't rely on just one source of income in retirement.

You should also have a portfolio of diversified investments in a retirement account from which you can withdraw money over time. Additionally, you should take a balanced approach by having a source of lifetime income such as an annuity if you won't have a pension, Littell recommended. Limit withdrawals to about 4% annually to ensure your nest egg lasts long enough.

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You Didn't Plan for High Healthcare Costs

You know you'll need to pay for healthcare in retirement. But you might not realize how high that expense will be.

"When I tell clients in their 40s that basic healthcare costs in retirement are currently more than $250,000, they about fall out of their chair," said Brandon Hayes, a certified financial planner with oXYGen Financial in Atlanta. In fact, retirees can expect to spend even more than that. Fidelity Investments estimates that a 65-year-old couple retiring in 2019 would need $285,000 to cover medical expenses in retirement.

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What To Do

When calculating how much you need to save for retirement, be sure to figure in healthcare costs, which could be drastically higher than what you're paying now. "Also, don't overlook small items like prescription co-pays for those who have diabetes and other health issues that require years of medication, which certainly won't end in retirement," Hayes said.

When you're in retirement, compare Medicare options to make sure you get the right plan for your needs. It can be worth spending more on the premium for a comprehensive Medicare Advantage plan or supplemental Medicare plans to get better coverage and reduce out-of-pocket costs, Littell said.

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You Didn't Take Inflation Into Consideration

When you're working, you might not feel the impact of inflation if your wages are rising along with prices. So, you might not factor inflation into your retirement savings calculations.

"On average in the USA, we see that the prices of goods and services rise by 3% per year," said Michael Hardy, a certified financial planner and vice president at Mollot & Hardy in Amherst, New York. "This means that over a 20-year time period, your $100,000 of retirement savings will likely be worth in terms of buying power 60% less."

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What To Do

If you didn't factor inflation into your retirement calculations, you might have to save more than previously projected, Hardy said. "I find that most people fail to account for this change and it ends up costing them dearly years later."

In addition to saving more to prepare for inflation, consider delaying Social Security benefits. You can maximize your Social Security benefit by waiting to claim it until age 70. Not only will your monthly check be bigger, but the Social Security Administration's cost-of-living adjustment -- which helps benefits keep up with inflation -- will be applied to that bigger payout. "Now a greater proportion of your income will be inflation-adjusted," Littell said.

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You Didn't Factor In Big-Ticket Items

One of the things you need to do before you retire is to create a post-retirement budget to estimate your expenses and how much income you'll need to cover them. However, you might end up spending more than expected in retirement if you don't factor in big-ticket items into your budget along with regular expenses, Littell recommended.

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What To Do

It's easy to overlook expenses such as a new car or home repairs when creating a retirement budget. That's a mistake. "When you're building your retirement budget, make sure you pay attention to those things as well," Littell said.

Make a list of big-ticket items you'll likely need to pay for in retirement and an estimate of how much they'll cost, then build an emergency fund in a savings account that's big enough to cover those expenses.

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You Changed Your Spending Habits

Your retirement budget projections might also be off if your spending habits change. "You might be a penny pincher now, but when you retire, that could all change," said Neal Frankle, a certified financial planner and founder of the financial blog Wealth Pilgrim.

For example, many retirees end up spending more money in retirement to keep themselves entertained. "Shopping and eating out become their way to remain social," Frankle said.

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What To Do

Look for free and low-cost ways to stay active and connected with others in retirement. "This is one great reason to join book clubs and volunteer in the community," Frankle said. "They cost you nothing yet provide great interaction."

There are plenty of other free ways to stay busy after retirement. You can take walks or hike, research your family's history or take advantage of free community events.

Check Out: The Most Affordable Places To Retire in the U.S.

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You Loaned Money to Your Kids

You could end up spending a lot more in retirement than expected if you lend money to your children. "I know that it's very difficult to say no to our kids," Frankle said. "But if you are going to help them out, you have to do so judiciously."

If you're not careful, you could run out of money. "I have a number of clients who were forced back to work because they didn't put a limit on the support they provided to their kids," Frankle said.

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What To Do

Having a solid financial plan will help you understand the risks of raiding your retirement savings to help your kids. "Your retirement security depends on the balance you create between your retirement income, assets and spending," Frankle said. "If you spend down your assets by making loans to the kids, you might not have sufficient assets to create the income you need to stay retired."

You'll realize this if you have a plan, he said. Without one, you'll have trouble establishing boundaries when it comes to your kids' requests for money.

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You Spoiled Your Grandkids

It's easy to fall into the trap of overspending on grandchildren. "Who doesn't want to spoil the heck out of their grandchildren, especially when you don't have to change the diapers?" Hayes said.

Grandchildren can bring so much joy, but they also can threaten your nest egg if you travel frequently to see them, take them and their parents on vacation, pay for their college tuition or move to be closer to them, Hayes said.

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What To Do

Have a plan for what you're willing to pay for before any grandchildren are born. "This protects everyone from the 'cute' factor of seeing that baby's smile for the first time and then sacrificing your own financial freedom in retirement," Hayes said.

Also, make sure your children know what expenses you're willing -- or not willing -- to cover. This is especially important when it comes to education costs. "Make this clear to your children so they can focus on their own financial plan and know what to expect in the future," Hayes said.

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You Didn't Take Taxes Into Consideration

You might not realize how big of a bite taxes will take out of your retirement income. For example, you'll have to pay income taxes on withdrawals from a 401(k) or IRA. So if you need $50,000 a year to cover expenses, you'll have to withdraw even more to cover the tax bill. If you don't take taxes into consideration, you could go through your savings quicker than you expected.

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What To Do

A 401(k) is a tax-deferred account because contributions are made from your paycheck before taxes. The money grows tax-free, but you have to pay taxes on withdrawals at your regular income-tax rate. A Roth IRA is a tax-free account because you can withdraw money tax-free in retirement.

"You can reduce the tax bite on your retirement income by saving in a combination of taxable, tax-deferred and tax-free accounts," said Mark Wilson, president of MILE Wealth Management in Irvine, California. For example, a taxable account would be an account with a brokerage company where you invest in stocks, bonds or mutual funds.

Contribute after-tax dollars to this sort of account. But, when you cash out your investments, you'll pay the capital gains tax rate, which is typically lower than the regular income tax rate. If you have a traditional IRA, consider converting it to Roth IRA in early retirement for a source of tax-free income, Wilson said.

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You Didn't Consider Fees

Retirement can cost more than expected because of the high fees people are paying on investments and retirement accounts. Somebody with $100,000 in a retirement account and terms of 2.5% over 30 years would be paying about $40,000 more in fees over that time than if the fees on their account had been just 1.5%.

"This could ultimately take a huge chunk out of your retirement savings over a long period of time," Hardy said.

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What To Do

Check your retirement account statements to see what fees are being charged. If the investments you have chosen have high fees, it might be time to switch. "We advocate for the average investor to have a passive, low-cost retirement portfolio to protect from the loss of value over time from fees," Hardy said.

If your retirement account offers low-cost index or target-date funds, consider those. An index fund is a mutual fund that tracks the performance of a major index, such as the S&P 500. A target-date fund reduces the risk in your portfolio by shifting from stocks to bonds as you near retirement.

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You Got Divorced

Many people aren't prepared for this scenario. "One sure way for retirement to cost a whole lot more than you'd planned on is to lose half of your retirement savings in a divorce," said Timothy R. Sobolewski, a certified financial planner with the Financial Planning Center in Amherst, New York.

"Frequently, a marriage fails as people near retirement age, making the problem even worse," Sobolewski said. "Armed with no skills that might have sustained a healthy marriage and no planning for the often unforeseen divorce, their hoped-for retirement will suffer greatly."

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What To Do

One way to avoid some of the financial fallout from a divorce in retirement is to have a prenuptial agreement. However, that might not be an option if you're already married, Sobolewski said. In that case, consider spending some money now on counseling to avoid the bigger cost of divorce down the road.

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You Took On New Debt

Ideally, you'll have paid off all debts -- including your mortgage -- before you retire. But taking on new debt in retirement by living beyond your means is a recipe for disaster.

"You can't run away from debt in retirement," Greg DuPont, a financial planner in Columbus, Ohio, told Business Insider.

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What To Do

If you take on new debt in retirement, be sure you are taking proactive steps to pay it down as soon as possible. One option is to refinance if lower interest rates are available. Another option is debt consolidation, which can be useful if you have multiple high-interest-rate debts. You should also try cutting down on spending to have more money to dedicate to paying down debt and should consider taking on a side hustle to bring in income in retirement that can be used specifically for paying off your debts.

Want To Retire Early in Your State? Aim To Save This Much

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You Withdraw Too Much Money Each Year

Conventional wisdom dictates that you should plan to withdraw 4% from your nest egg each year, but this might actually be too much. A Morningstar study found that with a 4% withdrawal rate, there was only a 50% chance that funds would last for a 30-year period in retirement. The amount you should withdraw will depend on the size of your nest egg and economic circumstances, so don't just follow a blanket rule and assume your withdrawal amounts will work out.

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What To Do

The Morningstar study found that the ideal withdrawal rate is closer to 2.8%, but again, this will vary based on your individual circumstances. It's best to meet with a financial professional to come up with a withdrawal strategy that will allow you to live comfortably without having to worry about running out of money in retirement.

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You're Not Taking Market Fluctuations Into Account

Even if you take the time to come up with a withdrawal strategy that works for your specific financial situation, keep in mind that this might have to change based on the market.

"If people are not adjusting when we have the inevitable downs in the market, that's one of the things to look for," DuPont told Business Insider. "Because that has an acceleration effect if they have money in the market and they're still pulling out the same way they were before. It just needs to be part of a monitored plan."

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What To Do

Due to the inevitable volatility of the market throughout your retirement, Forbes recommends assessing your withdrawal and return rates each year to determine if your withdrawal rate needs to be raised or lowered. An annual check-in with a financial advisor can help ensure your retirement strategy stays on the right track.

More From GOBankingRates

Gabrielle Olya contributed to the reporting for this article.

This article originally appeared on GOBankingRates.com: 14 Key Signs You Will Run Out of Money in Retirement

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Killexams : Is Finance a Good Career Path? An Industry Veteran's Insights

© Provided by Wealth of Geeks

Is finance a good career path these days? It's a tricky question. Depending on who you ask, you'll get a variety of answers.

One of the most surprising aspects of my two-decade career in financial services at two of the largest brokerage firms was how many career paths there are in the industry.

The financial services industry is not only limited to roles like Financial Advisor, Financial Planner, Finance Analyst, Research Analyst, Investment Banker, Accountant, or other jobs in finance.

Finance is a good career path because there are so many different paths. Many don't even require a finance degree or related coursework. This article explores some lesser-known opportunities in the industry.

Is Finance a Good Career Path? Some Things That Might Surprise You

Many people would be surprised to find out how many career paths there are and how well careers in financial services pay. Most jobs do not require a finance degree or business degree of any kind.

I switched paths often over my 22-year career. I believe in pursuing what is interesting until it no longer is. So I changed directions often. Each time came with a bump in compensation.

A business degree was not necessary for any of the following roles. I do not have a bachelor's degree in finance, yet I did them all. All of this pinballing around raised my income nearly 8x in 22 years.

Service

Financial Advisors need internal customer service. There are many areas within Service. Expertise in finance is generally not required. Positions in Service are easier ways to get your foot in the door.

Operations

In Financial Services, there are many roles behind the scenes. Many of these roles are reconciling financial data and financial records. These roles include supporting Tax Reporting, Financial Performance Reporting, Money Movement, Financial Statements, Securities Trading, Trade Corrections, Corporate Actions, Retirement Processing, and Fee Billing.

Product Development

This position is responsible for developing new products and features. They can be investment products or software. For instance, a financial planning software that either clients, Financial Advisors, or Financial Planners use to develop plans.

Investment Product Risk Manager

This was a role in the Compliance department, but I worked closely with other departments like Investment Banking, Products & Advice, Legal, and Finance. The Financial Services Industry and investment firms are highly regulated. Risk and Compliance are roles I never knew existed before my career began. There are many roles in these areas, and most pay well. Examples of roles within risk management include Financial Risk Manager, Product Risk, Technology Risk, and Credit Risk. For example, a Credit Analyst might oversee whether or not a client is taking on too much debt.

Analytics Manager

For me, this role was in the Investment Risk department, but these analytical roles exist in all areas of the industry. There are many roles that revolve around analyzing data to report to management. That is common in areas that have anything to do with traditional finance.

Generally, the more entry-level roles are about data mining and reporting. As you progress, however, you will need to have analytical skills.

The basic qualifications are experience or education with data. SQL is helpful, but tools are replacing the need to master it.

There is so much financial data to analyze. I recommend this as one of the best finance career paths in finance.

Product Manager: Advice & Research

Product Managers are in many areas. Product Managers are responsible for either investment products or applications and tools that Financial Advisors and Planners leverage.

A Product Manager in an Advice & Research department partners with stakeholders to determine firm financial advice on courses like: “Maxing out a 401k?” or “asset allocation.”

Program Manager: Investment Advisory

This role focused on managing a $100M program to evolve the firm's investment advisory offerings. I managed project managers and the financial management of the program.

I was responsible for the budgeting, financial modeling, financial reporting, and overall administration of the program. I did not do the forecasting, but I did oversee it.

Would You Say That Financial Professionals Are in Demand?

As long as money exists, our world will need financial professionals to manage it. From experience as an insider at two different financial firms, I know the fastest-growing roles. Compliance, Risk Management, Product Management, Data Science, AI/Machine Learning, and Analytics are hot areas right now. Knowing what I know now about salaries and industry trends, I would focus on these areas if I were in college. Plus, until our society does a better job teaching kids about money, we will need to lean on financial professionals for guidance.

What Career Paths Are Common for Financial Professionals?

Most career paths for financial professionals are either a) finance/accounting at any company or b) positions at financial services firms that require varying degrees of financial knowledge.

There is much opportunity with both. Within option a), there is potential upward movement in the company or the ability to move between companies. Within option b), there is the opportunity to move around from division to division.

The point is that career paths can have unexpected roads to turn down. They don't need to be the path you drew up. I have always believed that if you become what you said you wanted to become career-wise, it means you didn't learn anything along the way. That's not always true, but so often, it is.

New Trends or Movements in the Financial World

Agile-related positions are gaining momentum. I spent 22 years of my career at two larger financial services firms, and both are shifting to a more agile operating approach. This agile approach was brought from the tech ecosystem and prioritizes small yet diverse purpose-built teams that work autonomously. This is a big trend and a massive opportunity for those who are positioned for it since most people with agile management experience do not have a finance background, while most people in finance are not familiar with agile.

Skills and Traits That Make Someone a Good Fit for a Financial Career

Financial Services has so many career paths that any skills and traits make someone a good fit. The challenge is realizing which all positions even exist.

Everyone is aware of the stereotypical Finance positions such as Financial Analyst, Accounting, Research, etc. But that is just the tip of the iceberg of what exists. Portability, adaptability, and desire to learn are excellent traits for anyone in any career. Interpersonal skills are also helpful.

Finance is a good career path because there is so much opportunity. There are opportunities even if you don't know much about finance or investing.

What Factors Can Impact Your Salary in Financial Careers?

In my 22+ years in Financial Services, I noticed three core factors that impact someone's salary.

  1. Being strong in finance but not being in a traditional finance role.
  2. The closer you are to supporting “the field,” the higher the income. That becomes especially true when it comes to bonuses.
  3. Risk and Compliance positions. These positions aren't as desirable because they aren't glamorous. But they are necessary, so they pay well.

What Impact Can Certification Have On Your Financial Career?

In financial services, certifications are where I have seen the highest return on investment. Certified Financial Planners and Chartered Financial Analysts are significant designations to have. I am a CFA.

Each time I took it (it consisted of 3 tough exams), I received a significant pay boost. A Chartered Financial Analyst or Certified Financial Planner designation is not only credible letters to have behind your name, but studying for them legitimately increases your knowledge base. This knowledge shortens your learning curve. I am a big advocate of both.

To a lesser extent (in Financial Services), different FINRA licenses are helpful. I held several, but they are not as valuable as a CFP or CFA.

A Certified Public Accountant also opens up many doors in accounting and finance. A CPA was a common designation for senior management.

The return on investment of these designations is also considerably higher than a Finance Degree (especially a Master's Degree).

How Can Earning an Advanced Degree Impact Your Career in Finance?

It depends on what the advanced degree is. A Master of Business Administration (MBA) is typical. An Advanced Degree in data-related fields is highly impactful.

Someone interested in being a generalist should pursue an MBA. Many of the people I worked with had an MBA vs. those that did not have two noticeable advantages: they were better at public speaking and had a better network.

Many finance jobs that people readily think of are also competitive. It may be because so many other positions in finance are not widely known. That may impact the work-life balance of job seekers focused on the popular roles in the finance industry like securities analyst, investment analyst, and investment banker.

During my career in finance, I earned the same salary as these more popular positions but worked fewer hours and did not have a major in finance.

Final Thoughts

Finance is a great career path if you understand how many career paths exist in finance. This article only touched on a few. There are also roles in Marketing, Communications, Legal, Financial Advisor Development, Human Resources, Recruiting, etc. None of these require expertise in finance.

This article also didn't even touch on all of the finance careers in public accounting, financial accounting, accounts payable, payroll, auditing, or sales. It is also rewarding knowing that you are helping financial advisors help clients with their money.

This article was produced and syndicated by Wealth of Geeks.

Here Are the 30 Richest Female News Anchors | Wealth of Geeks

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Killexams : Thrive Money launches 30-day financial wellbeing

Thrive Money, an online financial education platform founded by B Corp certified financial planning company First Wealth and lifestyle and content creator Zanna van Dijk, announces the launch of its new financial wellbeing programme this January. It will be the first in a series designed to help people secure financial freedom, achieve financial confidence and develop a positive and healthy relationship with money.

The 30 Day Financial Wellbeing Programme comprises seven no-nonsense modules featuring step-by-step exercises, activities and online videos designed to introduce and educate participants on the basics of financial planning.

The course spans budgeting, goal-setting, investments, pensions and savings with the final module introducing participants to a one-page financial plan. A comprehensive library of downloadable resources and evidence-based tools is available alongside a Facebook community group that has been set up to help participants support one another and stay accountable.

With 24 million adults admitting they don’t feel comfortable managing their money, Thrive Money was founded earlier this summer to break down the barriers that currently exist through practical and accessible information and guidance from a team of qualified financial professionals.

Its mission is to democratise access to financial planning for underrepresented and marginalised groups who have been let down by traditional financial institutions through free personal finance tips, webinars, and now, digital courses.

Thrive Money currently provides content and guidance through a dedicated Instagram channel, fortnightly newsletter and a programme of live events. Over 90% of Thrive Money’s followers are women.

Co-founder Zanna van Dijk says, “I launched Thrive Money with First Wealth because I am passionate about wellbeing in all senses, not just moving our bodies and nourishing them with wholesome food, but mental and financial wellness too. Everyone is talking about reducing stress, but nobody is talking about how money plays into this. It is one of the biggest sources of pressure and anxiety for the majority of the population. If we can reach these people and provide them educational tools, like our easy-to-follow online course, we hope to empower them to take control of their finances and vastly Boost their wellbeing. As a woman, I am hugely passionate about tackling the glaring gender pay gap, gender savings gap and gender wealth gap. I hope that Thrive Money can provide more women the resources they need to push for the equality they deserve.”

Robert Caplan, director, First Wealth and co-founder, Thrive Money, says: “As the founder of an award-winning financial planning company I truly believe in, and have seen first hand that, great financial planning can change people’s lives for the better. I also, however, understand that the clients I deal with day to day do not represent the majority of people and that for most, high quality and reliable advice is out of reach. Thrive Money is our solution to this problem as we strive to close the advice gap. Almost all low cost financial advice in the UK is product led and aims to sell something. Thrive Money will look to deliver the fundamentals of proper financial planning in an engaging and low cost environment through the launch of our new digital online courses, live events and webinars. We will Boost people’s relationship with money and ultimately enhance their financial wellbeing through creating a community where like-minded individuals who have been let down by the financial institutions can share their experiences and
journey.”

Thrive Money is supported by a team of financial advisors and client managers at First Wealth as part of the company’s commitment to using the power of business to solve social and environmental challenges by making financial advice accessible to everyone.

As part of this, Thrive Money is partnering with GAIN – Girls are Investors – to offer 100 of its students complimentary access to the programme as part of the charity’s mission to Boost gender diversity in investment management by building a talent pipeline of entry-level female and non-binary candidates.

The Thrive Money 30 Day Financial Wellbeing Programme will be available to get from 31st January 2023 at https://www.thrivemoneyhq.co.uk/ and will cost £199 + VAT.

Wed, 07 Dec 2022 03:46:00 -0600 Rebecca Tomes en-US text/html https://ifamagazine.com/article/thrive-money-launches-30-day-financial-wellbeingprogramme/
Killexams : Chartered Financial Analysts Are The Rock Stars Of Finance

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.

CFA stands for chartered financial analyst, a professional designation awarded by the CFA Institute to candidates with proven competence in investment analysis and wealth management.

Think of CFAs as the all-stars of the money management industry: They excel in the competitive world of financial analysis and have put the extra work required to earn the gold standard in their profession.

CFA Definition

When you see CFA as part of someone’s title, that means they are a professional with in-depth training in the core skills of investment strategy and high-level money management. To earn the title of CFA, charter holders must demonstrate expertise in financial research, portfolio management, investment consulting, risk analysis and risk management.

Earning a CFA is often a requirement for becoming a chief investment officer at an investment firm or public company; engaging in credit analysis, corporate accounting and auditing; or doing financial planning for high net-worth individuals. The CFA Institute awards the certification, which is widely considered the apex for professional development in investment management.

“A CFA charter holder is someone who has attained one of the highest distinctions in the investment management profession,” says Jeremy Keil, a CFA and financial planner at Keil Financial Partners in New Berlin, Wisc. “They are trained in deep investment analysis, well beyond the knowledge of a typical financial advisor.”

The only downside to hiring a CFA? “They are tough to find,” Keil says. “Most work for institutions managing million-dollar-plus portfolios and don’t work directly with regular financial consumers.”

How to Earn a CFA

Becoming a chartered financial analyst is a complicated proposition, by design. It’s considered very tough to run the gauntlet of training and testing required to achieve CFA status.

“The requirements of becoming a CFA are rigorous and retain a type of elite status, which is another reason why CFAs can be expensive for the financial consumer who hires them,” says Daniel Rodriguez, director of operations at Hill Wealth Strategies, in Richmond, Va.

To become a CFA charter holder, candidates must:

  • Have a bachelor’s degree or a degree from an equivalent academic program or 11 months or fewer to graduation if they are still studying.
  • Have 4,000 hours of relevant work experience acquired over at least three sequential years.
  • Pass a series of three six-hour exams.
  • Be able to travel worldwide, be fluent in English and reside in a country that recognizes CFAs.

The tests are famously rigorous and may require 900 hours or more of study in 10 subject areas to prepare for. Most CFA applicants don’t make the cut, for a variety of reasons.

“The exams assess the person’s knowledge of economics, personal and professional ethical situations, money management scenarios, as well as other courses relating to money management and finance that must be expressed, depending on which test, either quantifiable or qualitatively, or both,” says Rodriguez. “The pass rate for each section of the three exams is less than 40%.” After all of the exams, that works out to a rate of less than one in five candidates receiving their CFA, according to the CFA Institute.

Even after the exams and the prerequisites to take the test are met, CFA’s still have some work to do. They need to pay annual dues and certify they remain in good standing with the CFA principles.

“In educational terms, holding a CFA is equivalent to achieving a master’s degree in one’s field,” says Rodriguez.

CFA vs CFP: Different Skills for Different Needs

The designations for certified financial planner (CFP) and CFA may seem somewhat similar at first glance. While both titles tread the same wealth management turf, a chartered financial analyst plays a very different role than a certified financial planner, and in most cases offers a very different skill set.

​“The main difference between a CFA and certified financial planner is that a certified financial planner works with individual clients to achieve personal financial goals in the short- and long-term,” says Rodriguez. “A chartered financial analyst works with large-scale, corporate investment opportunities and situations.”

A CFP focuses on financial planning for individuals and families, and they benefit from having strong people skills. CFPs know a great deal about investing and personal finances, but their knowledge is oriented toward building and managing investment portfolios for clients.

Meanwhile, the skillset of a CFA is focused on high-level investment management, and they are trained in economics, financial reporting, corporate finance and complex equity investing strategies. CFAs often work at large organizations and handle research and analysis for investment companies.

For regular individuals who need help setting up a financial plan and managing personal investments, a CFP generally more than meets their needs. “Unless, they have a great deal of financial wealth to manage,” says Rodriguez, in which case a CFA might make sense.

How Much Do CFAs Cost?

CFAs are well-paid financial professionals. According to Payscale.com, a chartered financial analyst typically earns a base salary of $90,000, plus bonuses of up to $50,000 annually, along with profit sharing, stock equity and other high-end employee benefits, in most cases.

“The cost of a CFA depends on the position they’re filling,” says David Wright, executive director of practice development at M&O Marketing in Southfield, Mich., who works with investment advisors to build their practices. “However, for the industry’s gold standard, we have seen a level pay increase of 7% per year since 2012.”

If you’re working one-on-one with a chartered financial analyst, expect to pay the same fee structure most financial advisors use. For example, expect a common charge of $1,500 to $2,500 for a one-time portfolio construction fee.

Past that, you’ll probably pay around 1% of your total assets managed on an annual basis. That means if you have a portfolio of $3 million under CFA management, you’ll be paying a management fee of $30,000 per year.

How to Choose a CFA

If you’re a high net-worth individual, chances are you can access the services of a certified financial analyst via your bank’s private banking services, an investment management firm, a hedge fund company or any other high-end wealth management firm.

Or you can go it alone. You should do your homework on prospective CFAs in any case, but when flying solo, you need to be extra careful.

“To hire a CFA, go to the CFA Institute Career Center, which connects employers and recruiters with investment professionals associated with the institute,” Wright says. “Due diligence is important when selecting any member of your investment team. FINRA.gov and the CFA Institute allow you to look up information on designation members and verify their status.” The CFA Institute also has a listing of all CFA charter holders.

If a CFA isn’t the best professional for your roster, try aiming for other money management designations that align with your personal needs. “Some common alternatives may be a certified financial planner or an investment advisor,” he adds.

You’ll also want to make sure any potential financial professionals in your life are fiduciaries, meaning they’re legally required to put your financial best interests above theirs.

Does a CFA Make Sense For You?

Whether you need to work with a CFA depends on two issues: The size of your investment portfolio and your unique investment management needs.

“Most clients need someone to answer their questions that aren’t related to stocks and bonds, and a certified financial professional is your best bet there,” says Keil. Whether that professional is a CFA, a CFP or something else entirely will depend on your personal financial situation.

Tue, 29 Nov 2022 04:28:00 -0600 Brian O'Connell en-US text/html https://www.forbes.com/advisor/investing/cfa-chartered-financial-analyst/
Killexams : Wealth Management

Family offices provide wealth management services to ultra high net worth individuals or familys or groups of affluent families that include bespoke portfolio management, insurance, trust, estate planning and tax services. Family offices can also manage charitable giving, establishing foundations, and wealth transfer services as well as provide concierge services for travel, aircraft and yacht management and personal security.

Wed, 16 Nov 2022 21:42:00 -0600 en text/html https://www.investopedia.com/wealth-management-4689683
Killexams : Financial Friday: Budgeting for life Financial Friday: Budgeting tips to remember © Provided by Huntsville-Decatur WAFF Financial Friday: Budgeting tips to remember

HUNTSVILLE, Ala. (WAFF) - Budgeting is important when it comes to financial wellness. A budget is basically our cash management plan. It’s a spending plan that allows us to tell our money what to do, instead of it telling us what to do with it. Financial experts say if you’re prepared this holiday season and managing your money can be a breeze.

WAFF talked to Redstone Federal Credit Union’s, Financial Education Coordinator, Kaeshier Fernandez. He works with kids and people of all ages educating them about finances and budgeting. He came up with a simple acronym for the basics of starting a budget or reworking one “LOW.”

  1. L = List It: They say the easiest way to clean your closet is to take it all out and take stock of what you have. The same applies to budgeting. List all of your common expenses and bills. Looking at your last few monthly statements will help, at least the last three.
  2. O = Organize It: With all of your expenses and debts out in the open, now you can start creating budgeting categories. Get an idea of how much you currently spend in each category. Start taking a look at where you can cut down on spending, or where you can make adjustments and find more affordable options.
  3. W = Work It: Now start working to implement your new spending plan. Track your spending in a spreadsheet or with a budgeting app so that you can see how close you are to your budgets in each category. And then just continue to adjust as necessary.

Fernandez said the important thing to remember with budgeting is that it is a constant work in progress. “Life happens, good or bad and that is going to impact your budget. So remember to be flexible and adjust when you need to cut back and save,” said Fernandez.

Let Redstone’s certified financial counseling help you with your budgeting process. Go to redfcu.org/financialwellness for more information.

Fri, 02 Dec 2022 05:01:19 -0600 en-US text/html https://www.msn.com/en-us/money/personalfinance/financial-friday-budgeting-for-life/ar-AA14QcOb
Killexams : The New Financial Planning Process That Saves Time, Empowers Clients

A trend toward collaborative financial planning, facilitated by sharing planning software onscreen via Zoom, is empowering clients and speeding up plan creation for advisors.

“Doctors who have the best relationships with patients and better outcomes have collaborative discussions with them. I think we’re moving toward a similar approach in financial planning,” argues Meghaan Lurtz, a finance professor at Kansas State University and senior research associate with Kitces.com, in an interview with ThinkAdvisor.

Traditionally, “there was a lot of ‘Wizard of Oz,’ with the advisors going behind the curtain, doing the plan and then coming back out,” she says.

But “with collaborative, interactive planning, it’s, ‘Let’s [together] find the [strategies] that are best for you.’ That helps clients in a deeper way,” maintains Lurtz, who lectures on financial psychology at Columbia University and is an adjunct professor in the University of Maryland’s program for Certified Financial Planner Board of Standards certification.

At Kitces.com, she’s part of the research team that creates and runs surveys probing how advisors conduct financial planning, how they market and the ways they use technology, among other areas.

A “Wellness Study,” for example, revealed the “shocking” finding, says Lurtz, that “pay was not a way in which advisors, particularly females, were being discriminated against.”

In the interview, Lurtz, a contributing writer to the new book, “The Psychology of Financial Planning,” developed by the CFP Board of Standards’ advisory board and ThinkAdvisor’s parent company, ALM (National Underwriter/ALM, April 2022), stresses that advisors need empathy “to be on the same side as the client” to understand their goals and values.

“If you can’t understand what’s really making your client tick, it will just make your job harder,” she says.

The interview also covers clients who might benefit from financial therapy (Lurtz is a past president of the Financial Therapy Association) and when money is used to manipulate, among other issues.

Her research has appeared in the Journal of Financial Planning, The Wall Street Journal and other prominent media.

ThinkAdvisor recently held a phone interview with Lurtz, who was speaking from Monterey, California.

She points out that multi-generational clients who establish a family money motto “get everybody swimming in the same direction and feeling empowered and connected.”

Here are highlights of our conversation:

THINKADVISOR: How has financial planning changed in the past few years?

MEGHAAN LURTZ: More advisors are doing collaborative planning rather than using the financial plan as a thing they sell in and of itself.

Instead of, “I’ll do the financial plan with my planning software, and then I’ll deliver it to you,” they’re putting the software up on a computer screen and going through the numbers with the client over Zoom.

From that, there’s a simple one-page financial plan that gets delivered.

What are the benefits of collaborative financial plans to the advisor and to the client?

It can make the financial planning process faster because the clients are there to provide feedback right away, talk things through and update them in real time.

It speaks a lot to the idea of collaborative leadership versus “I’m the leader, and this is what we’re doing.”

We know from health care that doctors who have the best relationships with patients and better outcomes have collaborative discussions with them.

I think we’re moving toward a similar approach in financial planning. It’s a huge deal for people to feel empowered about their money.

Describe, please, the traditional scenario for doing a financial plan.

There was a lot of “Wizard of Oz,” with the advisor going behind the curtain, doing the plan and then coming back out.

I think financial planners wanted the ideal client to be a delegator: “Just tell me what you need done. I’ll do it and then let you know what the answer is.”

The idea was for the client to delegate to the advisor and then listen to their advice. Now, with collaborative, interactive planning, it’s “Let’s [together] find the [strategies] that are best for you.” That helps clients in a deeper way.

There seems to be more financial therapy being conducted these days. Why is it needed?

People have a lot of “stuff” when it comes to their finances. At one end of the spectrum, psychologists or therapists diagnose [and treat] gambling disorders.

At the other end, we have financial planners who might discover that a client potentially has a gambling disorder.

It’s not the advisor’s job to cure a disorder, though they may be the first person to discover that’s going on.

There’s a space in the middle of the spectrum, where there’s a financial issue.

Let’s say a client grew up in a household where there was a gambling issue. When their parent won, there were lavish gifts; when they didn’t win, it was really scary.

As an adult, trying to make healthy financial choices, they have memories and beliefs that came from when they were a kid. The emotions attached to those are deep-seated.

What should the advisor do about that?

It’s the financial planner’s job to be open to this — not that they need to fully explore or work on it. But it’s helpful to know in the decision-making process.

What does a Certified Financial Therapist’s work involve?

There are clients who want to unpack how growing up in an unstable household has impacted their finances. They can do that emotional work with a financial therapist.

The Financial Therapy Association provides the Certified Financial Therapist designation [Certified Financial Therapist-ITM].

You’ve held client interventions not only to fix something that’s broken but so-called “good” interventions too. Tell me about the latter.

This is where we talk about what’s good and try to turn it into something that’s great. For instance, I’ve been a part of multi-generational meetings working together to develop a financial motto for the family.

People go through their different money stories about how they think and feel about money and then collectively find a theme and designate a motto for the family.

Mon, 28 Nov 2022 05:15:00 -0600 en text/html https://www.thinkadvisor.com/2022/11/28/the-new-financial-planning-process-thats-deeper-and-faster/
Killexams : A certified financial planner and author shares his 5 strategies to recession-proof your finances before a downturn hits
  • Some financial analysts predict that there will be a recession within the next 12 months.
  • A recession, along with inflation and rising interest rates, could really impact Americans' wallets.
  • The time to make your finances more resilient is before the economic downturn starts. 

With inflation at a 40-year high and interest rates rising rapidly, consumers could be facing a recession. The Conference Board puts the probability of a US recession within the next 12 months at 96%. 

Consumers are already dealing with higher grocery and utility bills. A recession typically brings with it job uncertainty, stricter lending policies by financial institutions, and slower growth in investments. All of this leads to a possible recession putting consumers' financial security at risk. 

Preparation for any unpleasant recession-induced consequence should start long before an economic downturn starts — and it's not too late, according to Jamie Hopkins, a Certified Financial Planner and personal finance and retirement expert. He believes that there are tangible steps that investors and consumers can take to protect their financial goals. In "Find Your Freedom," an upcoming book he co authored, Hopkins advises that working with a financial planner will allow you to live your best life by design and not by default. His goal with this book is to help people retire better and find the freedom in using their money well. 

He shared with Insider his top strategies for protecting your finances before and during a financial downturn.

Get smarter with your cash

Many people who see a recession on the horizon might immediately start to sell off investments and want to keep their cash in an ordinary savings account; Hopkins cautions against this.

"Parking your cash in the bank is not the best thing to do. If you can be strategic and smart during recessions, this can be a good time to invest,'' Hopkins said. 

He added: "Look into cash equivalents like an ETF. If you are looking for a place to store cash, there are market funds and REITs. Having too much cash in the bank during this time can result in missed investment growth opportunities." 

Put off expensive purchases for a while

Experts typically advise against spending more than 30% of your net income on discretionary purchases. With high inflation and increasing interest rates, it would be best to put off large expenditures that are not necessary.

"If you can delay buying a home, expensive vacations, etc., it's reasonable to do that," Hopkins said. "Since we are headed into an uncertain time economically, it's best to keep discretionary purchases at a minimum until we are on solid footing again." 

How are you servicing your debt?

In troubling economic periods, the first thought may be to try to pay off all debt but having access to that money for emergencies or opportunities to invest may be a better use of those funds.

"There is a difference between negative high-interest credit card debt and a mortgage or a low-interest rate line of credit for emergencies," says Hopkins. "Being in a position where you can respond effectively to emergencies or even a job loss makes you better prepared for an economic downturn."

Stay the course with your investment portfolio

If you are close to retirement, consider having any withdrawals that you would make initially on hand in cash.

 "If you plan to have, for example, the first 2 years of your retirement withdrawals in cash and ready, you will not be panic right now about what the market is doing and how inflation and interest rates will impact your portfolio," Hopkins said.

It's also important not to make snap decisions with your portfolio. "Think about where you are right now and don't do anything to jeopardize that based on short-term economic events. The span of retirement is typically 20 years, a recession will most likely last a year," Hopkins said. 

Prepare your finances before the economic downturn begins

Taking steps to prepare for the economic downturn before it happens will take away the stress and panic that can arise when experiencing a recession.

"I cannot stress this enough: don't wait until the last minute and don't panic, you will almost always make a bad financial decision when it's based in stress and panic," Hopkins said. "If you are feeling nervous about your financial picture heading into a recession, think about what steps you can take to strengthen your financial position.

"It's during times like these that having a financial plan is key, if you have a good financial and investment strategy, you will be in a strong financial position for whatever downturn comes."

Thu, 10 Nov 2022 10:00:00 -0600 en-US text/html https://www.businessinsider.com/personal-financial-planning-tips-strategies-recession-proof-cfp-author-2022-11
Killexams : The value of a Certified Financial Planner

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