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CIA-III education - The Certified Internal Auditor Part 3 Updated: 2023

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CIA-III The Certified Internal Auditor Part 3

2019 CIA exam Syllabus, Part 3 – Business Knowledge for Internal Auditing
100 questions l 2.0 Hours (120 minutes)

The CIA exam Part 3 includes four domains focused on business acumen, information security, information technology, and financial management. Part 3 is designed to test candidates knowledge, skills, and abilities particularly as they relate to these core business concepts.​

Domains Collapse All
I. Business Acumen (35%)
​ ​ ​Cognitive Level
​​1. Organizational Objectives, Behavior, and Performance
A​ ​Describe the strategic planning process and key activities (objective setting, globalization and competitive considerations, alignment to the organization's mission and values, etc.) Basic
​B ​Examine common performance measures (financial, operational, qualitative vs. quantitative, productivity, quality, efficiency, effectiveness, etc.) Proficient
​C ​​Explain organizational behavior (individuals in organizations, groups, and how organizations behave, etc.) and different performance management techniques (traits, organizational politics, motivation, job design, rewards, work schedules, etc.) ​Basic
​D ​​Describe managements effectiveness to lead, mentor, guide people, build organizational commitment, and demonstrate entrepreneurial ability ​Basic
2. Organizational Structure and Business Processes
A ​Appraise the risk and control implications of different organizational configuration structures (centralized vs. decentralized, flat structure vs. traditional, etc.) Basic​
​B ​Examine the risk and control implications of common business processes (human resources, procurement, product development, sales, marketing, logistics, management of outsourced processes, etc.) Proficient
​C ​Identify project management techniques (project plan and scope, time/team/resources/cost management, change management, etc.) ​Basic
​D Recognize the various forms and elements of contracts (formality, consideration, unilateral, bilateral, etc.) Basic
​3. Data Analytics
​A ​Describe data analytics, data types, data governance, and the value of using data analytics in internal auditing ​Basic
​B ​Explain the data analytics process (define questions, obtain relevant data, clean/normalize data, analyze data, communicate results) ​Basic
​C Recognize the application of data analytics methods in internal auditing (anomaly detection, diagnostic analysis, predictive analysis, network analysis, text analysis, etc.) ​Basic
II. Information Security (25%)
​ ​ ​Cognitive Level
​​1. Information Security
A​ ​Differentiate types of common physical security controls (cards, keys, biometrics, etc.) Basic
​B ​Differentiate the various forms of user authentication and authorization controls (password, two-level authentication, biometrics, digital signatures, etc.) and identify potential risks Basic
​C ​​Explain the purpose and use of various information security controls (encryption, firewalls, antivirus, etc.) ​Basic
D​ ​Recognize data privacy laws and their potential impact on data security policies and practices Basic​
​E ​​Recognize emerging technology practices and their impact on security (bring your own device [BYOD], smart devices, internet of things [IoT], etc.) Basic​
​F ​Recognize existing and emerging cybersecurity risks (hacking, piracy, tampering, ransomware attacks, phishing attacks, etc.) ​Basic
G​ ​​Describe cybersecurity and information security-related policies ​Basic
III. Information Technology (20%)
​ ​ ​Cognitive Level
​​1. Application and System Software
A​ Recognize core activities in the systems development lifecycle and delivery (requirements definition, design, developing, testing, debugging, deployment, maintenance, etc.) and the importance of change controls throughout the process Basic
​B ​Explain basic database terms (data, database, record, object, field, schema, etc.) and internet terms (HTML, HTTP, URL, domain name, browser, click-through, electronic data interchange [EDI], cookies, etc.) Basic
​C ​​Identify key characteristics of software systems (customer relationship management [CRM] systems; enterprise resource planning [ERP] systems; and governance, risk, and compliance [GRC] systems; etc.) ​Basic
2. IT Infrastructure and IT Control Frameworks
A ​Explain basic IT infrastructure and network concepts (server, mainframe, client-server configuration, gateways, routers, LAN, WAN, VPN, etc.) and identify potential risks Basic​
​B Define the operational roles of a network administrator, database administrator, and help desk Basic​​
​C Recognize the purpose and applications of IT control frameworks (COBIT, ISO 27000, ITIL, etc.) and basic IT controls ​Basic
​3. Disaster Recovery
​A Explain disaster recovery planning site concepts (hot, warm, cold, etc.) ​Basic
​B Explain the purpose of systems and data backup ​Basic
​C ​Explain the purpose of systems and data recovery procedures ​Basic
IV. Financial Management (20%)
​ ​ ​Cognitive Level
​​1. Financial Accounting and Finance
A​ ​Identify concepts and underlying principles of financial accounting (types of financial statements and terminologies such as bonds, leases, pensions, intangible assets, research and development, etc.) Basic
​B ​Recognize advanced and emerging financial accounting concepts (consolidation, investments, fair value, partnerships, foreign currency transactions, etc.) Basic
C​ ​​Interpret financial analysis (horizontal and vertical analysis and ratios related to activity, profitability, liquidity, leverage, etc.) Proficient​
D​ ​​Describe revenue cycle, current asset management activities and accounting, and supply chain management (including inventory valuation and accounts payable) Basic​
​E ​​Describe capital budgeting, capital structure, basic taxation, and transfer pricing Basic​
2. Managerial Accounting
A ​Explain general concepts of managerial accounting (cost-volume-profit analysis, budgeting, expense allocation, cost- benefit analysis, etc.) Basic​
​B ​Differentiate costing systems (absorption, variable, fixed, activity-based, standard, etc.) Basic​​
​C ​Distinguish various costs (relevant and irrelevant costs, incremental costs, etc.) and their use in decision making ​Basic Additional noteworthy elements related to the revised CIA Part Three exam syllabus:

The number of courses covered on the Part Three exam has been greatly refocused to the core areas that are most critical for internal auditors.
The exam syllabus features a new subdomain on data analytics.
The information security portion of the exam has been expanded to include additional courses such as cybersecurity risks and emerging technology practices.
The largest domain is “Business Acumen,” which makes up 35% of the exam.
A portion of the exam requires candidates to demonstrate a basic comprehension of concepts; another portion requires candidates to demonstrate proficiency in their knowledge, skills, and abilities.
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Question: 307
Which of the following is an important senior management responsibility with regard to
information systems security?
A. Assessing exposures.
B. Assigning access privileges.
C. Identifying ownership of data.
D. Training employees in security matters.
Answer: A
Senior management is responsible for risk assessment, including identification of risks and
consideration of their significance, the likelihood of their occurrence, and how they should
be managed. Senior management is also responsible for establishing organizational
policies regarding computer security and implementing a compliance structure. Thus,
senior management should assess the risks to the integrity, confidentiality, and
availability of information systems data and resources.
Question: 308
Management's enthusiasm for computer security seems to vary with changes in the
environment, particularly the occurrence of other computer disasters. Which of the
following concepts should be addressed when making a comprehensive recommendation
regarding the costs and benefits of computer security?
Potential loss if security is not implemented
Probability of occurrences
Cost and effectiveness of the implementation and operation of computer security
A. I only.
B. I and II only.
C. III only.
B. I, Il, and Ill.
Answer: D
Potential loss is the amount of dollar damages associated with a security problem or loss
of assets. Potential loss times the probability of occurrence is an estimate expected value)
of the exposure associated with lack of security. It represents a potential benefit associated
with the implementation of security measures. To perform a cost-benefit analysis, the
costs should be considered. Thus, all three items need to be addressed.
Question: 309
Of the following, the greatest advantage of a database server) architecture is
A. Data redundancy can be reduced.
B. Conversion to a database system is inexpensive and can be accomplished quickly.
C. Multiple occurrences of data items are useful for consistency checking.
D. Backup and recovery procedures are minimized.
Answer: A
Data organized in files and used by the organization's various applications programs are
collectively known as a database. In a database system, storage structures are
created that render the applications programs independent of the physical or logical
arrangement of the data. Each data item has a standard definition, name, and format, and
related items are linked by a system of pointers. The programs therefore need only to
specify data items by name, not by location. A database management system handles
retrieval and storage. Because separate files for different applications programs are
unnecessary, data redundancy can be substantially reduced.
Question: 310
In an inventory system on a database management system DBMS), one stored record
contains part number, part name, part color, and part weight. These individual items are
called
A. Fields.
B. Stored files.
C. Bytes.
D. Occurrences.
Answer: A
A record is a collection of related data items fields). A field data item) is a group of
characters representing one unit of information.
Question: 311
An inventory clerk, using a computer terminal, views the following on screen part
number, part description, quantity on hand, quantity on order, order quantity, and reorder
point for a particular inventory item. Collectively, these data make up a
A. Field.
B. File.
C. Database.
D. Record.
Answer: D
A record is a collection of related data items fields). A field data item) is a group of
characters representing one unit of information. The part number, part description, etc.,
are represented by fields.
Question: 312
Which of the following is the elementary unit of data storage used to represent individual
attributes of an entity?
A. Database.
B. Data field.
C. File.
D. Record.
Answer: B
A data item or field) is a group of characters. It is used to represent individual attributes of
an entity, such as an employee's address. A field is an item in a record.
Question: 313
A file-oriented approach to data storage requires a primary record key for each file. Which
of the following is a primary record key?
A. The vendor number in an accounts payable master file.
B. The vendor number in a closed purchase order transaction file.
C. The vendor number in an open purchase order master file_
D. All of the answers are correct.
Answer: A
The primary record key uniquely identifies each record in a file. Because there is only one
record for each vendor in an accounts payable master file. the vendor number would be the
appropriate key.
Question: 314
A business is designing its storage for accounts receivable information. What data file
concepts should be used to provide the ability to answer customer inquiries as they are
received?
A. Sequential storage and chains.
B. Sequential storage and indexes.
C. Record keys, indexes, and pointers.
D. Inverted file structure indexes, and internal labels.
Answer: C
A record key is an attribute that uniquely identifies or distinguishes each record from the
others. An index is a table listing storage locations for attributes, often including those
other than the unique record key attribute. A pointer is a data item that indicates the
physical address of the next logically related record.
Question: 315
Auditors making database queries often need to combine several tables to get the
information they want. One approach to combining tables is known as
A. Extraction.
B. Joining.
C. Sorting.
D. Summarization.
Answer: B
In data management terminology, joining is the combining of data files based on a
common data element. For example, if rows in a table containing information about
specified parts have been selected, the result can be joined with a table that contains
information about suppliers. The join operation may combine the two tables using the
supplier number assuming both tables contained this element) to provide information
about the suppliers of particular parts.
Question: 316
Users making database queries often need to combine several tables to get the information
they want. One approach to combining tables is
A. Joining.
B. Merging.
C. Projecting.
D. Pointing.
Answer: A
Joining is the combining of two or more relational tables based on a common data
element. For example, if a provider table contains information about suppliers and a parts
table contains information about parts, the two tables can be joined using the supplier
number assuming both tables contain this attribute) to provide information about the supplier
of particular parts.
Question: 317
All of the following are methods for distributing a relational database across multiple
servers except
A. Snapshot making a copy of the database for distribution).
B. Replication creating and maintaining replica copies at multiple locations)_
C. Normalization separating the database into logical tables for easier user processing).
D. Fragmentation separating the database into parts and distributing where they are
needed).
Answer: C
A distributed database is stored in two or more physical sites. The two basic methods of
distributing a database are partitioning and replication_ However. normalization is a
process of database design, not distribution. Normalization is the term for determining
how groups of data items in a relational structure are arranged in records in a database.
This process relies on "normal forms," that is. conceptual definitions of data records and
specified design rules_ Normalization is intended to prevent inconsistent updating of data
items. It is a process of breaking down a complex data structure by creating smaller,
more efficient relations, thereby minimizing or eliminating the repeating groups in each
relation.
Question: 318
In a database system, locking of data helps preserve data integrity by permitting
transactions to have control of all the data needed to complete the transactions. However,
implementing a locking procedure could lead to
A. Inconsistent processing.
B. Rollback failures.
C. Unrecoverable transactions.
D. Deadly embraces retrieval contention).
Answer: D
In a distributed processing system, the data and resources a transaction may update or use
should be held in their current status until the transaction is complete. A deadly embrace
occurs when two transactions need the same resource at the same time. If the system does
not have a method to cope with the problem efficiently, response time worsens or the
system eventually fails. The system should have an algorithm for undoing the effects of
one transaction and releasing the resources it controls so that the other transaction can run
to completion.
Question: 319
One advantage of a database management system DBMS) is
A. That each organizational unit takes responsibility and control for its own data.
B. The cost of the data processing department decreases as users are now responsible for
establishing their own data handling techniques.
C A decreased vulnerability as the database management system has numerous security
controls to prevent disasters.
D The independence of the data from the application programs. which allows the
programs to be developed for the user's specific needs without concern for data capture
problems.
Answer: D
A fundamental characteristic of databases is that applications are independent of the
database structure; when writing programs or designing applications to use the database.
only the name of the desired item is necessary. Programs can be developed for the user's
specific needs without concern for data capture problems. Reference can be made to the
items using the data manipulation language, after which the DBMS takes care of locating
and retrieving the desired items. The physical or logical structure of the database can be
completely altered without having to change any of the programs using the data items,
only the schema requires alteration.
Question: 320
Which of the following is a false statement about a database management system
application environment?
A. Data are used concurrently by multiple users.
B. Data are shared by passing files between programs or systems.
C. The physical structure of the data is independent of user needs.
D. Data definition is independent of any one program.
Answer: B
In this kind of system, applications use the same database There is no need to pass files
between applications.
Question: 321
Which of the following should not be the responsibility of a database administrator?
A. Design the content and organization of the database.
B. Develop applications to access the database.
C. Protect the database and its software.
D. Monitor and Boost the efficiency of the database.
Answer: B
The database administrator DBA) is the person who has overall responsibility for
developing and maintaining the database. One primary responsibility is for
designing the content of the database. Another responsibility of the DBA is to protect
and control the database. A third responsibility is to monitor and Boost the efficiency of
the database. The responsibility of developing applications to access the database belongs
to systems analysts and programmers.
Question: 322
The responsibilities of a data administrator DA) include monitoring
A. The database industry.
B. The performance of the database.
C. Database security.
D. Backup of the system.
Answer: A
The DA handles administrative issues that arise regarding the database. The DA acts as an
advocate by suggesting new applications and standards. One of the DA's responsibilities is
to monitor the database industry for new developments. In contrast, the database
administrator DBA) deals with the technical aspects of the database
Question: 323
To trace data through several applies qti on programs, an auditor needs to know what
programs use the data, which files contain the data, and which print-td reports display the
data. If data exist only in a database system, the auditor could probably find all of this
information in a
A. Data dictionary.
B. Database schema.
C. Data encryptor.
D. Decision table.
Answer: A
The data dictionary is a file possibly manual but usually computerized) in which the
records relate to specified data items. It contains definitions of data items, the list of
programs used to process them, and the reports in which data are found. Only certain
persons or entities are permitted to retrieve data or to modify data items. Accordingly.
these access limitations are also found in the data dictionary.
Question: 324
Image processing systems have the potential to reduce the volume of paper
circulated throughout an organization. To reduce the likelihood of users relying on the
wrong images, management should ensure that appropriate controls exist to maintain the
A. Legibility of image data.
B. Accessibility of image data.
C. Integrity of index data.
D. Initial sequence of index data.
Answer: C
Data integrity is a protectibility objective. If index data for image processing systems are
corrupted, users will likely be relying on the wrong images.
Question: 325
What language interface would a database administrator use to establish the structure of
database tables?
A. Data definition language.
B. Data control language.
C. Data manipulation language.
D. Data query language.
Answer: A
The schema is a description of the overall logical structure of the database using data-
definition language DDL), which is the connection between the logical and physical
structure of the database. DDL is used to define, or determine, the database.
Question: 326
Query facilities for a database system would most likely include all of the following
except
A. Graphical output capability.
B. Data dictionary access.
C. A data validity checker.
D. A query-by-example interface.
Answer: C
The least likely feature of a query tool would be a data validity checker because the
database system has already enforced any validity constraints at the time the data were
inserted in the database. Any further data validity checking would be a function of a user
application program rather than a query.
Question: 327
Which of the following would be the most appropriate starting point for a compliance
evaluation of software licensing requirements for an organization with more than 15,000
computer workstations?
A. Determine if software installation is controlled centrally or distributed throughout the
organization.
B. Determine what software packages have been installed on the organization' s
computers and the number of each package installed.
C. Determine how many copies of each software package have been purchased by the
organization.
D. Determine what mechanisms have been installed for monitoring software usage.
Answer: A
The logical starting point is to determine the point(s) of control. Evidence of license
compliance can then be assessed. For example, to shorten the installation time for revised
software in a network, an organization may implement electronic software distribution
ESD), which is the computer-to-- computer installation of software on workstations.
Instead of weeks, software distribution can be accomplished in hours or days and can be
controlled centrally. Another advantage of ESD is that it permits tracking or metering of
PC program licenses.
Question: 328
Use of unlicensed software in an organization
I. Increases the risk of introducing viruses into the organization
II. Is not a serious exposure if only low-cost software is involved
III. Can be detected by software checking routines that run from a network server
A. I only.
B. I and II only.
C. I, II, and Ill.
D. I and Ill only.
Answer: D
Antivirus measures should include strict adherence to software acquisition policies.
Unlicensed software is less likely to have come from reputable vendors and to have been
carefully tested.Special software is available to test software in use to determine whether it
has been authorized.
Question: 329
The Internet consists of a series of networks that include
A. Gateways to allow personal computers to connect to mainframe computers.
B. Bridges to direct messages through the optimum data path_
C. Repeaters to physically connect separate local area networks LANs).
D. Routers to strengthen data signals between distant computers.
Answer: A
The Internet facilitates information transfer between computers. Gateways are hardware or
software products that allow translation between two different protocol families. For
example, a gateway can be used to exchange messages between different email systems.
Question: 330
Which of the following is true concerning HTML?
A. The acronym stands for HyperText Material Listing.
B. The language is among the most difficult to learn
C. The language is independent of hardware and software.
D. HTML is the only language that can be used for Internet documents.
Answer: C
HTML is the most popular language for authoring Web pages. It is hardware and software
independent, which means that it can be read by several different applications and on
many different kinds of computer operating systems. HTML uses tags to mark information
for proper display on Web pages.
Question: 331
Which of the following is a false statement about XBRL?
A. XBRL is freely licensed.
B. XBRL facilitates the automatic exchange of information
C. XBRL is used primarily in the U.S.
D. XBRL is designed to work with a variety of software applications.
Answer: C
XBRL stands for eXtensible Business Reporting Language. It is being developed for
business and accounting applications. It is an XML-based application used to create,
exchange, and analyze financial reporting information and is being developed for
worldwide use.
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Financial Certified education - BingNews https://killexams.com/pass4sure/exam-detail/CIA-III Search results Financial Certified education - BingNews https://killexams.com/pass4sure/exam-detail/CIA-III https://killexams.com/exam_list/Financial Origin acquires Finny to Fill a Critical Gap in Workplace Financial Education

Origin

Acquisition will help Origin users Boost global financial literacy and debt management with more complete toolkit for smarter financial planning

Origin acquires Finny to Fill a Critical Gap in Workplace Financial Education

Origin is reimagining financial wellness in the workplace, with the most comprehensive all-in-one financial planning platform

BOSTON, June 05, 2023 (GLOBE NEWSWIRE) -- Origin, the startup reimagining financial wellness in the workplace, announced today it has acquired Finny, a financial health startup. Origin will integrate Finny's financial education, content, curriculum, and debt management tools into its financial wellness platform addressing the urgent need for improved financial literacy. Terms were not disclosed.

Money is the #1 source of stress - more than jobs, health, and relationships combined. That stress is exacerbated in the current economic environment, which is presenting people with once-in-a-generation financial challenges. Origin is tackling this problem head on by expanding access to wealth management for those who have historically been boxed out due to high barriers to entry. The Origin platform simplifies finances for individuals making it easy to track spend, get expert advice, manage investments, and take action to hit financial goals.

By acquiring Finny, Origin will now be able to offer its customers the valuable resources and financial education content necessary to empower employees to make more informed decisions about their financial future. For instance, people can now learn about credit reporting, understand the nuances involved in calculating a credit score, and then access their own credit score and get actionable advice on how to Boost it.

Origin Co-Founder and CEO Matthew Watson started the company in 2019. Despite starting his career working in finance on Wall Street, Watson couldn’t find resources widely available to easily manage his personal finances, and saw the same pattern for others. “Most people are simply priced out of financial planning tools, and financial advisors traditionally only work with high income individuals. This leaves tens of millions of Americans in the dark, left with unnecessary fees as well as missed investment and tax opportunities that can cost them thousands of dollars a year,” Watson shared.

With tremendous demand for an all-in-one, more accessible financial planning platform, Origin has grown quickly, more than doubling its revenues year over year. To date Origin has raised $70M from top VC funds including 01 Advisors, where Managing Partner Dick Costolo experienced Origin’s customer pain point firsthand at Twitter. “During my tenure as CEO at Twitter, I witnessed firsthand the knowledge gap that exists among employees and even HR teams when it comes to understanding equity and financial benefits,” said Costolo. “I strongly believe that Origin can bridge that gap and revolutionize financial literacy and education in a way that has not been achieved before.”

Today Origin is offered to individuals as an employee benefit to help employees alleviate financial stress and help them be happier and more productive. Offering Origin as a benefit also helps to attract and retain staff: 93 percent of employees want their company to offer increased access to financial planning (but only 28 percent do so). Plus Origin acts as extra support for powering the People teams, helping with comp, benefits, equity grants, and reducing employers’ liability by bringing in a third-party registered financial advisor as a resource for employees.

Lattice is one of the many companies offering Origin as a benefit to its employees. “Origin has been an extremely popular benefit among our employees, providing them with valuable insights into their finances, compensation, and equity,” said Cara Allamano, Chief People Officer at Lattice. “Now with Origin’s acquisition of Finny they’ll have more financial resources at their fingertips. Our employees have been looking for this type of educational content and tutorials, and having this all in one place within the Origin platform is incredibly beneficial.”

On the employee side, Origin members are matched with a certified financial planner to discuss their finances, goals, and develop an action plan. The planner will provide personalized advice that helps them make smarter money decisions and prepare for life’s biggest milestones from buying a home, starting a family, paying off student debt, or planning for retirement to name a few. Individuals can also use the Origin platform and mobile app to track and visualize all their finances – connecting accounts, and then creating budgets, managing investments and retirement savings. Origin can also help them understand equity compensation and tax consequences of selling. Each person is matched with a CFP that they work with on an ongoing basis.

The acquisition of Finny is a significant milestone for Origin, as it demonstrates the company's dedication to offering a comprehensive and well-rounded financial wellness platform. Finny has been working with employers and over 60,000 consumers to provide top-notch financial education. Integrating Finny's financial education resources and debt management tools will enable Origin to make an even more significant impact on employees' financial health.

"Finny's expertise in financial education and focus on debt management will be an invaluable addition to the Origin platform," said Watson. "We believe that addressing the educational gap in employee financial education is key to helping individuals achieve financial security."

"Origin's commitment to simplifying money management for employees aligns with Finny's mission to Boost global financial literacy," said Chihee Kim and Milan Kovacevic, Co-Founders of Finny. "Together, we share a common goal of helping individuals achieve a secure financial future, and we're excited to join forces to further expand our reach and impact."

About Origin
Origin is reimagining financial wellness in the workplace, with the most comprehensive all-in-one financial planning platform. Combining proprietary technology with Certified Financial Planners, Origin is an all-in-one software based financial management platform that enables people to track spend and income, get expert advice, take action, and manage their money confidently and with ease. Origin is offered by hundreds of innovative employers including Lattice, Roku and Udemy. Learn more about Origin at useorigin.com.

Media contact:
Kerry Metzdorf
Big Swing Communications
978-463-2575
kerry@big-swing.com

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/8d44297d-939f-46af-a491-ae40233457c4

Mon, 05 Jun 2023 01:11:00 -0500 en-US text/html https://finance.yahoo.com/news/origin-acquires-finny-fill-critical-130600262.html
Boston-based financial wellness startup acquires Calif. startup No result found, try new keyword!To date, the startup has raised $70 million in capital, including $56 million in Series B funding led by a firm co-founded by Dick Costolo, former CEO of Twitter. Mon, 05 Jun 2023 06:08:00 -0500 text/html https://www.bizjournals.com/boston/news/2023/06/05/boston-based-firm-acquiries-finny.html Exclusive: Origin buys Finny to expand financial wellness app for employees Just a moment...
Mon, 05 Jun 2023 01:00:00 -0500 en-US text/html https://www.axios.com/pro/fintech-deals/2023/06/05/origin-buys-finny-financial-wellness-app
How To Choose A Financial Advisor

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

Are you seeking assistance with your financial management? If so, you’re not alone. Many Americans could benefit from financial guidance. In fact, according to the National Financial Education Council, the average American incurs a cost of $1,200 per year due to a lack of personal finance knowledge.

Choosing a good financial advisor can help you avoid these costs and focus on your goals. Financial advisors aren’t just for rich people—working with a financial advisor is a great choice for anyone who wants to get their personal finances on track and set long-term objectives. To find the ideal financial advisor for your requirements, consider following our 5 key steps.

Related: Find A Financial Advisor In 3 minutes

Step 1: Decide What Part of Your Financial Life You Need An Advisor For

Before you speak to a financial advisor, decide which aspects of your financial life you need help with. When you first sit down with an advisor, you’ll want to be ready to explain your particular money management needs.

Keep in mind that financial advisors provide more than just investment advice. The best financial planner is the one who can help you chart a course for all your financial needs. This can cover investment advice for retirement plans, debt repayment, insurance product suggestions to protect yourself and your family and estate planning.

Depending on where you are in life, you may not need comprehensive financial planning. People whose financial lives are relatively straightforward, like young people without families of their own or significant debt, might only need help with retirement planning.

People with complex financial needs, however, may need extra assistance. They could be looking to establish college funds or trusts for their children, navigate aggressive debt payment situations or solve tricky tax problems. Not all types of financial advisors offer the same menu of services, so decide which services you need and let this guide your search.

Step 2: Learn About the Different Types of Financial Advisors

There’s no federal law that regulates who can call themselves a financial advisor or provide financial advice. While many people call themselves financial advisors, not all have your best interest at heart. That’s why you have to carefully evaluate potential financial advisors and make sure they are good for you and your money.

Part of learning about the different types of advisors is understanding fiduciary duty. Some, but not all, financial advisors are bound by fiduciary duty, meaning that they are legally required to work in your financial best interest. Other people who call themselves advisors are only held to a suitability standard, meaning they only must suggest products that are suitable for you—even if they’re more expensive and earn them a higher commission. (The SEC is trying to regulate this, though, by limiting the use of “advisor” to those who hold themselves to a fiduciary standard.)

Regardless of which kind of advisor you choose, you should make sure you know how they earn money. This helps you determine if their recommendations are actually better for you—or for their wallets.

Here’s how to think about these four types of financial advisors:

1. Fee-Only Financial Advisors

Fee-only financial advisors earn money from the fees you pay for their services. These fees may be charged as a percentage of the assets they manage for you, as an hourly rate, or as a flat rate.

Almost all fee-only advisors are fiduciaries. Generally speaking, they have chosen to work under a fee-only model to reduce any potential conflicts of interest. Because their income is from clients, it’s in their best interest to make sure you end up with financial plans and financial products that work best for you.

2. Financial Advisors Who Earn Commissions

Some financial advisors make money by earning sales commissions from third parties. Among financial advisors that earn sales commissions, some may advertise themselves as “free” financial advisors that do not charge you fees for advice. Others may charge fees, meaning they derive only part of their income from third-party commissions.

Either way, financial advisors who earn third-party sales commissions derive some or all of their income from selling you certain financial products. If you choose to work with a financial advisor who earns sales commissions, you need to take extra care.

Commission-only advisors are not fiduciaries. They work as salespeople for investment and insurance brokerages and are only held to suitability standards. In contrast, some fee-based financial advisors are fiduciaries, though it’s important to determine if they’re always acting as fiduciaries or if they “pause” fiduciary duty when discussing certain types of products, like insurance.

Related: Find A Financial Advisor In 3 minutes

Keep in mind, commissions aren’t bad in and of themselves. They’re not even necessarily red flags.

Some financial products are predominantly sold under a commission model. Take life insurance: A fee-based planner who receives compensation for helping you purchase a life insurance policy may still have your best interests at heart when advising on other financial products.

“To be clear, there’s nothing wrong with paying the commission for life insurance,” says Karen Van Voorhis, a fee-based certified financial planner (CFP) and Director of Financial Planning at Daniel J. Galli & Associates in Norwell, Mass. “That’s how the structure of that industry works.”

Purchasing financial products via financial advisors that earn commissions may be a matter of convenience, especially if someone will receive a commission regardless of where you buy the product. What’s important is understanding the difference. And if you work with a fee-based financial advisor, understand when they are acting as a fiduciary, especially when they help you purchase financial products.

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3. Registered Investment Advisors

Registered Investment Advisors (RIAs) are companies that provide fiduciary financial advice. RIAs employ Investment Advisor Representatives (IARs), who are bound by fiduciary duty. An RIA may have one or hundreds of IARs working for it.

IARs may call themselves financial advisors and may be fee-only or fee-based. Some may have additional credentials, including the certified financial planner (CFP) designation.

“The certified financial planner designation is really the gold standard in the financial planning industry,” says Van Voorhis. A CFP designation indicates a financial advisor has passed rigorous industry exams covering real estate, investment, and insurance planning as well as has years of experience in their fields.

Because of their wide range of expertise, CFPs are well-suited to help you plan out every aspect of your financial life. They may be particularly helpful for those with complex financial situations, including managing large outstanding debts and will, trust and estate planning.

4. Robo Advisors

Robo advisors offer low-cost, automated investment advice. Most specialize in helping people invest for mid- and long-term goals, like retirement, through preconstructed diversified portfolios of exchange-traded funds (ETFs).

“For younger people who are really tech-savvy, a robo advisor just to manage retirement funds could be a perfect solution,” says Brian Behl, a CFP at Behl Wealth Management in Waukesha, Wisc. “I don’t think they’re going to get as in-depth advice on insurance and retirement and taxes.”

People with complex financial needs should probably choose a conventional financial advisor, although many robo advisors provide financial planning services a la carte or for higher net-worth clients.

“While the robo advisors have really disrupted the industry…I do think there’s still a place for human advisors right now,” says Corbin Blackwell, a CFP at robo advisor Betterment.

Betterment, for example, allows clients to purchase individual financial advising sessions, and Personal Capital, Wealthsimple, and Betterment provide regular financial planning for clients with higher account balances for a management fee.

Step 3: Choose What Kind of Financial Advice You Need

Services offered by financial advisors vary from advisor to advisor, but they may provide financial advice on any of the following topics:

  • Investment advice: Financial advisors research different investment options and make sure your investment portfolio stays within your desired level of risk.
  • Debt management: If you have outstanding debts, like credit card debt, student loans, car loans, or mortgages, financial advisors will work with you to chart a plan for repayment.
  • Budgeting help: Financial advisors are experts in analyzing where your money goes once it leaves your paycheck. Advisors can help you craft budgets so you’re prepared to reach your financial goals.
  • Insurance coverage: Financial advisors may examine your current policies to identify any gaps in coverage or recommend new types of policies, like disability insurance or long-term care coverage, depending on your financial situation.
  • Tax planning: Tax planning involves strategizing ways to decrease the amount of taxes you may pay, like by large charitable donations or tax-loss harvesting. Keep in mind that not all financial planners are tax experts and that tax planning is different from tax preparation. You will probably still need a CPA or tax software to file your taxes.
  • Retirement planning: Financial advisors can help you build funds for the ultimate long-term goal, retirement. And then, once you’re retired or nearing retirement, they can help ensure you’re able to keep your money safe.
  • Estate planning: For those who wish to leave a legacy, financial advisors can help you transfer your wealth to the next generation, whether that’s family, friends, or charitable causes.
  • College planning: If you hope to fund loved ones’ educations, financial advisors can craft a plan to help you save for their higher education.

In addition to investment management and financial planning, financial advisors also offer emotional support and perspective during volatile economic times. During the beginning of the coronavirus pandemic in March of 2020, for instance, client demand for financial advisor contact increased by almost 50%.

Related: Find A Financial Advisor In 3 minutes

“I think that during these times, we can be a source of reason,” says Blackwell. “We can weather the storm. We’ve built this portfolio for a reason.”

When choosing a financial advisor, make sure they offer the services you’re looking for in your financial and non-financial lives.

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Step 4: Decide How Much You Can Pay Your Financial Advisor

It used to be that financial advisors charged fees that were a percentage of the assets they managed for you. Today advisors offer a wide variety of fee structures, which helps make their services accessible to clients of all levels of financial means.

  • Commission-only financial advisors may seem free on paper, but they may receive a portion of what you invest or purchase as a payment. These “free” financial advisors typically are available through investment or insurance brokerages. Remember, these advisors may only be held to suitability standards, so they may end up costing what you would pay for a similar financial product suggested by a fiduciary financial advisor—or more.
  • Fee-only and fee-based financial advisors may charge fees based on the total amount of assets they manage for you (assets under management) or they may charge by the hour, by the plan, through a retainer agreement, or via a subscription model. Common average financial advisor fee rates are listed in the table below:

Step 5: Research Financial Advisors

Financial advice comes in many forms, and there are a variety of different kinds of financial professionals, so you need to do your homework. Make sure the advisor guiding your financial decisions is trustworthy and capable.

There are a few good ways to find a financial advisor. Ask friends, family and peers for recommendations when trying to find a financial advisor near you. Alternatively, look for financial advisors online. Many professional financial planning associations provide free databases of financial advisors:

When evaluating advisors, be sure to consider their credentials as well as research their backgrounds and fee structures. You can view disciplinary actions and complaints filed against financial advisors using FINRA’s BrokerCheck. And remember, just because someone is part of a financial planning association, that doesn’t mean they’re a fiduciary financial advisor.

Key Questions to Ask When Choosing a Financial Advisor

When meeting a financial advisor for the first time, it’s important to obtain the answers to these questions and ensure you’re satisfied with their responses:

  • Fiduciary Status: Are you a fiduciary, committed to acting in my best interest?
  • Compensation Structure: How do you make money? Understand their fee structure and any potential conflicts of interest.
  • Consistency of Fiduciary Duty: Do you always act as fiduciaries, even when selling commission-based products?
  • Financial Planning Approach: What is your approach to financial planning? Learn about their strategies and methodologies.
  • Available Services: What financial planning services do you offer? Ensure their offerings align with your specific needs.
  • Client Profile: What kind of clients do you typically work with? Confirm if they have experience catering to clients similar to you.
  • Account Minimums: Do you have any account minimums? Determine if their requirements match your financial situation.
  • Conflicts of Interest: Do you have any conflicts of interest in managing your money? Ensure transparency and alignment of interests.
  • Required Information: What information do you need me to provide to develop my financial plan? Gather relevant documents.
  • Meeting Frequency: How many times and how often will we meet? Establish expectations for ongoing communication.
  • Collaboration with Advisors: Will you collaborate with your other advisors, such as CPAs or attorneys? Coordinate efforts for comprehensive financial management.

Related: Find A Financial Advisor In 3 minutes

The Bottom Line

Because of the ambiguity in the industry, you have to exercise caution to make sure you get the right financial advisor who meets your fiduciary and financial needs. That said, when you choose the right financial advisor for you, they can help you achieve your financial goals and financially protect your loved ones and their futures.

“So much of what I do in a life-centered approach to financial planning and wealth management is walk out life with people,” says Wes Brown, a CFP at CogentBlue Wealth Advisors in Knoxville, Tenn. “I think there’s value in an ongoing relationship where somebody can help you walk through the various waypoints you’re going to come to.

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Financial Advisor Frequently Asked Questions (FAQs)

What is a financial advisor?

Financial advisors are personal finance experts who provide you financial advice and manage your money. Some—but not all—are fiduciaries. A fiduciary acts only in your best financial interest.

“A financial advisor is like a coach,” says Matt Chancey, a certified financial planner (CFP) at Dempsey Lord Smith in Tampa, Fla. “It helps to have someone keep you accountable to your goals and make sure that you aren’t making any major missteps.”

What can a financial advisor do for you?

A good financial investment advisor can evaluate your current situation and develop a comprehensive plan to guide you through your financial life.

“You don’t know what you don’t know,” says Marianela Collado, a CFP and certified public accountant (CPA) at Tobias Financial Advisors in Plantation, Fla. “By opening your finances up, a good financial adviser can suggest a wide range of opportunities that the client probably never thought of or wouldn’t even know to ask for.”

Who needs a financial advisor?

Though some people may think they don’t need a financial advisor until they’ve amassed at least $1 million, the amount of assets you hold shouldn’t be the sole determining factor. In fact, financial advisors work with clients of all tax brackets and backgrounds.

How much does a financial advisor cost?

Financial advisor fees can vary widely. This is due to there being different methods for a financial advisor to generate their income. Some advisors are fee-only. Other advisors are commission-based. Some advisors even work on a hybrid model between the two.

It’s recommended that you research how the individual advisor you’re choosing generates their income before starting to work with them.

When should I get a financial advisor?

Financial advisors become most helpful when your financial life becomes complex. That might be when you get married, have children, get divorced, are managing many competing debts, come into an unexpected windfall or are navigating end-of-life financial decisions.

Thu, 01 Jun 2023 02:22:00 -0500 John Schmidt en-US text/html https://www.forbes.com/advisor/investing/how-to-choose-a-financial-advisor/
Financial tips for new college grads

Photo courtesy DepositPhotos

For new college graduates, receiving that first post-degree paycheck can be almost as exciting as getting the diploma itself. But it also presents a challenge: Given the many demands on a young person’s budget, how should those funds be managed?

We asked five money experts to share their best personal finance strategies to help this year’s college grads successfully launch their financial lives. Here’s what they said.

FIND YOUR BUDGETING STYLE

To figure out how to allocate your money toward needs, wants and everything else, Erin Lowry, author of the “Broke Millennial Workbook,” says that instead of following the latest budgeting trend on TikTok, it’s helpful to just sit down with a pen and paper. “Write down what your big expenses are,” she says.

After accounting for large items like rent, car payments and food, you can then see what nonessentials also fit. “You might want to go out to dinner with friends, build up new work attire or adopt a dog,” Lowry says. Writing out the budget helps you figure out what you can afford and when, she adds.

“We conceive of budgets as restrictive things that keep us from having fun, but you should be thinking of it as a way of controlling how your money is spent. If you don’t know, you’ve sacrificed all control,” Lowry says.

FACTOR IN TAXES

Melissa Jean-Baptiste, a financial educator and the author of the book “So… This Is Why I’m Broke,” says it’s easy to forget to account for taxes, so you might have less take-home pay than you anticipated. Retirement contributions and other deductions can further lower that amount.

Jean-Baptiste suggests setting aside some time to really understand your first paycheck and all those deductions. “Take yourself on a money date so you understand how much you’re bringing home and how much you have left to save and invest,” she says.

SAVE SMARTLY

Even if they’re paying off debt, Alex Rezzo, a certified financial planner and the founder of Andante Financial in the Los Angeles area, urges new grads to start saving for retirement right away. “There will always be a more immediate excuse to delay saving for retirement,” he says, but he urges people to find a way to save at least 1% of each paycheck and to increase that amount over time.

He also suggests parking your direct-deposited paycheck funds in an online bank that offers a competitive high-yield account and is backed by the Federal Deposit Insurance Corp. That way, the money likely will earn more than it would sitting in a traditional bank’s checking or savings account.

PROTECT YOUR CREDIT

As you build your independent financial life, making at least the minimum payments on your student loan and credit card accounts can help protect your credit. Missing a payment, Lowry says, could damage your credit score. She suggests focusing on paying down any high-interest debt first to reduce the total amount going to interest.

Lowry also suggests freezing or locking your credit, which makes it much harder for identity thieves to apply for new credit in your name. Just remember that if you freeze your credit, you’ll also have to thaw it if you want to apply for credit yourself, she says, adding, “you might want to wait until you’re through a period of time when you’re applying for new accounts.”

MAKE MISTAKES AND LEARN FROM THEM

Kennedy Reynolds, chief education officer at Acorns, a financial services company, says mistakes are part of the learning process, whether it’s overspending or accruing credit card debt, but the key is to learn from the experience. “If you have debt to pay down, take that paycheck and split it up” toward those bills until they are paid off, she says.

“Try to picture yourself later and know that the choices you’re making now will have a long-term impact,” she adds.

LOOK BEYOND YOUR PAYCHECK

Linda Whiteman, a personal finance teacher at Outschool, an online learning platform for kids, teaches her students to think entrepreneurially. After all, she tells them, most millionaires are business owners.

“You don’t have to work for someone,” she says. She asks her students to consider what they can teach others, whether offering piano lessons online or creating digital art. Pursuing additional income streams outside of a paycheck can help grow wealth, she adds.

Jean-Baptiste found success doing exactly that: She used her experience as a teacher to create and sell lesson plans online. “I was bringing in $10,000 a year that I could put toward debt,” she says. Her lesson plans eventually turned into the financial literacy business that she operates today.

Earning additional income outside of a paycheck, she says, “can be a game-changer” — financial wisdom that applies at any age.

This column was provided to The Associated Press by the personal finance website NerdWallet. Kimberly Palmer is a personal finance expert at NerdWallet and the author of “Smart Mom, Rich Mom.” Email: [email protected] Twitter: @KimberlyPalmer.

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Mon, 05 Jun 2023 08:02:00 -0500 en-US text/html https://neworleanscitybusiness.com/blog/2023/06/05/financial-tips-for-new-college-grads/
Look beyond your paycheck: Financial tips for new college grads

For new college graduates, receiving that first post-degree paycheck can be almost as exciting as getting the diploma itself. But it also presents a challenge: Given the many demands on a young person’s budget, how should those funds be managed?

We asked five money experts to share their best personal finance strategies to help this year’s college grads successfully launch their financial lives. Here’s what they said.

To figure out how to allocate your money toward needs, wants and everything else, Erin Lowry, author of the “Broke Millennial Workbook,” says that instead of following the latest budgeting trend on TikTok, it’s helpful to just sit down with a pen and paper. “Write down what your big expenses are,” she says.

After accounting for large items like rent, car payments and food, you can then see what nonessentials also fit. “You might want to go out to dinner with friends, build up new work attire or adopt a dog,” Lowry says. Writing out the budget helps you figure out what you can afford and when, she adds.

“We conceive of budgets as restrictive things that keep us from having fun, but you should be thinking of it as a way of controlling how your money is spent. If you don’t know, you’ve sacrificed all control,” Lowry says.

Melissa Jean-Baptiste, a financial educator and the author of the book “So… This Is Why I’m Broke,” says it’s easy to forget to account for taxes, so you might have less take-home pay than you anticipated. Retirement contributions and other deductions can further lower that amount.

Jean-Baptiste suggests setting aside some time to really understand your first paycheck and all those deductions. “Take yourself on a money date so you understand how much you’re bringing home and how much you have left to save and invest,” she says.

Even if they’re paying off debt, Alex Rezzo, a certified financial planner and the founder of Andante Financial in the Los Angeles area, urges new grads to start saving for retirement right away. “There will always be a more immediate excuse to delay saving for retirement,” he says, but he urges people to find a way to save at least 1% of each paycheck and to increase that amount over time.

He also suggests parking your direct-deposited paycheck funds in an online bank that offers a competitive high-yield account and is backed by the Federal Deposit Insurance Corp. That way, the money likely will earn more than it would sitting in a traditional bank’s checking or savings account.

As you build your independent financial life, making at least the minimum payments on your student loan and credit card accounts can help protect your credit. Missing a payment, Lowry says, could damage your credit score. She suggests focusing on paying down any high-interest debt first to reduce the total amount going to interest.

Lowry also suggests freezing or locking your credit, which makes it much harder for identity thieves to apply for new credit in your name. Just remember that if you freeze your credit, you’ll also have to thaw it if you want to apply for credit yourself, she says, adding, “you might want to wait until you’re through a period of time when you’re applying for new accounts.”

Kennedy Reynolds, chief education officer at Acorns, a financial services company, says mistakes are part of the learning process, whether it’s overspending or accruing credit card debt, but the key is to learn from the experience. “If you have debt to pay down, take that paycheck and split it up” toward those bills until they are paid off, she says.

“Try to picture yourself later and know that the choices you’re making now will have a long-term impact,” she adds.

Linda Whiteman, a personal finance teacher at Outschool, an online learning platform for kids, teaches her students to think entrepreneurially. After all, she tells them, most millionaires are business owners.

“You don’t have to work for someone,” she says. She asks her students to consider what they can teach others, whether offering piano lessons online or creating digital art. Pursuing additional income streams outside of a paycheck can help grow wealth, she adds.

Jean-Baptiste found success doing exactly that: She used her experience as a teacher to create and sell lesson plans online. “I was bringing in $10,000 a year that I could put toward debt,” she says. Her lesson plans eventually turned into the financial literacy business that she operates today.

Earning additional income outside of a paycheck, she says, “can be a game-changer” — financial wisdom that applies at any age.

This column was provided to The Associated Press by the personal finance website NerdWallet. Kimberly Palmer is a personal finance expert at NerdWallet and the author of “Smart Mom, Rich Mom.” Email: kpalmer@nerdwallet.com. Twitter: @KimberlyPalmer.

Mon, 05 Jun 2023 03:59:00 -0500 text/html https://brooklyn.news12.com/look-beyond-your-paycheck-financial-tips-for-new-college-grads
What FP Canada in-house education means for financial planning

“[W]e are committed to ensuring that all Canadians have access to trusted, professional and qualified advice,” Tashia Batstone, president and CEO of FP Canada, said in a release announcing the change. “Central to this mission is ensuring that all QAFP professionals and CFP professionals are equipped with the best possible technical and professional skills.”

Jason Knell, academic director, curriculum and corporate training programs with SeeWhy Learning in Mississauga, Ont., said taking education in-house allows FP Canada to “close any gaps in proficiency,” especially considering that multiple designations have been approved for use of the “financial planner” title in Ontario. In addition to the QAFP and CFP, these include designations overseen by the Canadian Securities Institute (CSI), Financial Advisors Association of Canada (Advocis) and Canadian Institute of Financial Planning (CIFP).

The designations are “not all equivalent,” Knell said. “For that reason, I’m a big advocate that FP Canada has taken a leadership approach like this to set the bar high.”

CSI, Advocis and the CIFP, along with Business Career College (BCC), are national education providers for FP Canada’s designations. They’ve been providing technical education, as have post-secondary institutions, and can continue to do so.

“FP Canada recognizes that different candidates are interested in pursuing different education and certification pathways,” the certification body said in an emailed statement.

As education agreements come due, “we encourage the national providers to reapply for another agreement with us to deliver the materials that lead to certification,” said Alexandra Macqueen, vice-president of learning, development and professional practice with FP Canada. “Competition is healthy.” (Post-secondary institutions can also renew their education agreements.)

In an emailed statement, Jason Watt, vice-president of BCC in Edmonton, said, “Given the usual quality of FP Canada’s content, I believe other providers (like us) will have to step up our game. I hope this results in an overall better experience for all students, with any provider, pursuing certification.”

But Keith Costello, president and CEO of the CIFP, said that as FP Canada becomes the dominant education provider for the CFP over time, “the most obvious outcome is going to be lack of competition [in education].” Less competition means candidates could end up paying more for content that’s not necessarily best-in-class, he said.

FP Canada said it isn’t accepting applications from new national providers to provide technical education. And the current national providers can’t offer end-to-end programming for the QAFP and CFP because, as non-degree-granting institutions, they’re ineligible to be accredited to offer the professional education program.

The certification body said its technical education was priced to ensure competitiveness, and bundle pricing is available. Those with industry qualifications get cost savings from exemptions.

Costello foresees more competition under title regulation, with education providers creating financial planning designations in line with established regulatory requirements.

With Ontario’s multiple-credential title protection regime, which could be replicated in other provinces, more designations were inevitable, he said: “FP Canada bringing their education in house — that will only speed that process up.”

As more designations are approved, a positive result will be “choice for the advisor, so they can get the best price and the best content available to be a financial planner,” Costello said.

The fear with a multiple-credential title regime is that it could cause individuals and firms to look for the lowest-cost credential, Knell said. However, “smart students are going to realize, ‘I need a quality program’” to serve clients well, he said.

In addition to regulatory approval, any new credential would face the hurdle of industry acceptance, Knell said: “Most of the big employers … have already identified what they deem to be an acceptable designation.”

He suggested third-party providers may find greater business opportunity in focusing on QAFP and CFP exam-prep materials. “There are so many students looking for help in attaining these designations,” he said. Third parties provide exam prep for the chartered financial analyst designation, he noted, while the CFA Institute* provides the primary curriculum.

A potential consequence of FP Canada offering education in-house is that Canadian universities could be deterred from creating an undergraduate degree in financial planning, said Jodi Letkiewicz, associate professor of finance with York University in Toronto. Universities could relegate financial planning to “the continuing-education bucket … and not a discipline in and of itself,” she said.

Canadian post-secondary institutions that offer financial planning programming typically do so in the context of a degree in commerce (or postgradudate certificate), as at York. Canada has no undergraduate degree in financial planning, while the U.S. has many — a result of how the country’s educational system developed historically amid land-grant institutions and home economics programs, Letkiewicz said.

A Canadian undergrad in financial planning would allow for “rich” and “dedicated” financial planning content as well as a “more well-rounded” education, Letkiewicz said.

York University worked with FP Canada to pilot the certification body’s enhanced professional education program.The pilot program replaced FP Canada’s former capstone course requirements and included a behaviour focus, along with professional responsibilities and more case studies. York was chosen because of its “unique expertise and background in human behaviour,” said FP Canada.

FP Canada’s professional program is “not as robust” as the “intense case-based” capstone course at York that it replaced, Letkiewicz said. “Students are not getting as good of an education.”

York’s capstone course offering, which included a live case study, had exceeded CFP certification requirements and cost students less, Letkiewicz said. The university could reinstate the capstone course and still considers doing so, she added.

Still, compared to the capstone course requirements, FP Canada said its professional education programs are better preparing financial planners “due to their holistic focus versus the singular focus of [the] capstone,” which was financial planning.

And changes to QAFP certification announced last month will include a live interactive client discovery to the professional education program. The live discovery is “a very nice way to build client-facing skills for certificants, so they arrive to the marketplace … having modelled those client skills very directly,” Macqueen said.

FP Canada said it will soon review the CFP professional education program too, with plans to add live components after getting feedback on the QAFP professional education program.

* A previous version of this story said that the CFA Society provides the primary CFA curriculum. In fact, the CFA Institute provides the curriculum. Return to the corrected sentence.

Sat, 03 Jun 2023 16:24:00 -0500 en-CA text/html https://www.advisor.ca/news/industry-news/what-fp-canada-in-house-education-means-for-financial-planning/
Financial Advisers Prefer Traditional Investments, but Interest in Alternatives Grows © Provided by Retirement Daily on The Street

DENVER (June 1, 2023) – Since the start of the COVID-19 pandemic, traditional investment vehicles have been challenged by trending investment opportunities that have burst onto the marketplace. But despite these opportunities, financial advisers seem to maintain a strong preference for those investment vehicles that have stood the test of time, according to the 2023 Trends in Investing Survey, conducted by the Journal of Financial Planning and the Financial Planning Association (FPA), the leading membership organization for Certified Financial Planner professionals.

In the wake of a challenging year in 2022, investors sought guidance from their financial professionals on navigating the evolving investment landscape. Against this backdrop, FPA and the Journal of Financial Planning surveyed 191 investment professionals from February 14, 2023, to April 7, 2023, to gauge their perspectives on emerging opportunities for their clients. The survey focused on the utilization of alternative investments and the growing interest in exchange-traded funds (ETFs).

While the survey revealed a stronger interest in alternative investments among professionals (28%) since before the pandemic, concerns regarding liquidity (48%) and cost (41%) remain prevalent. Furthermore, some respondents expressed reservations about the ability of these products to meet clients' needs (38%).

"As traditional stock and bond asset classes suffered from losses and volatility in 2022, it's not surprising that interest in alternative investments increased among financial professionals. However, overall use of alternatives remains relatively low,” 2023 FPA President James Lee, CFP, CRPC, AIF, said in a press release. “Going forward, advisers will need more education on how alternative investments can provide potential diversification and risk mitigation benefits to overcome concerns about liquidity, fees, and expenses."

While alternative investments are catching the attention of some financial advisers, the survey highlighted that over 90 percent of investment professionals currently use or recommend exchange-traded funds (ETFs). Notably, half of the respondents indicated plans to increase their utilization of ETFs over the next 12 months (50%), while only three percent plan to decrease their use. Investment professionals are embracing a balanced approach, combining active and passive strategies, after a shift toward either one in exact years.

Other key survey findings include:

  • Other commonly used investments include cash and equivalents (76%), non-wrap mutual funds (64%), individual stocks (51%), and bonds (47%).
  • Despite a generally bearish economic outlook, over 71% of respondents expressed confidence in the traditional 60/40 portfolio's ability to deliver historical returns.
  • General volatility (85%) and inflation (82%) ranked as the top concerns among investors. While interest in COVID-19's impact on financial situations waned (15%), the survey noted a decline in client interest in Environmental, Social, and Governance (ESG) or socially responsible investing (22%) compared to previous years.
  • The survey findings also emphasized the importance of regular portfolio re-evaluation. Approximately two-thirds of respondents reported revisiting allocations as part of their ongoing strategy (68%), driven primarily by economic factors (63%) and concerns about inflation (53%).
  • Despite the increasing utilization of ETFs, the survey highlighted that investment professionals continue to adopt a balanced approach, with 64% implementing a combination of active and passive strategies.

Of those surveyed, 79 percent are Certified Financial Planner™ professionals, 53 percent indicated they work as an independent IAR/RIA, and 47 percent say they have more than 21 years of financial services experience. The 2023 Trends in Investing Survey provides valuable insights into the current investment landscape and the strategies employed by investment professionals to navigate evolving market conditions.

Additional research by FPA is available at www.financialplanningassociation.org/learning/research.

Thu, 01 Jun 2023 07:39:00 -0500 en-US text/html https://www.msn.com/en-us/money/savingandinvesting/2023-trends-in-investing-survey-what-financial-advisers-are-saying/ar-AA1bZCLs
DR. SUE RIEG: Investing in financial aid for PASSHE students can help teacher shortage

Pennsylvania’s children — many of whom face academic and social-emotional challenges — deserve high-quality, well-prepared teachers, but due to teacher shortages many school districts are struggling to hire and retain well-qualified candidates.

The teacher shortage is real and alarming, but there is hope.

The shortage has been building for many years. Since 2010, new in-state teacher certifications have decreased by nearly 70 percent to record low levels. In response, the state has issued more emergency teaching permits than new certificates. According to 2021-22 data, 6,366 people with bachelor’s degrees received an emergency permit with only 4,220 new graduates earning teaching certificates.

The shortages of teachers exist throughout the profession, but are most acute in math, science and special education — all subjects where students need great state-certified teachers to help them master courses and prepare for the future.

There are real consequences for students when their schools cannot fill vacant teacher positions or hire quality candidates. Some school districts have been forced to increase class sizes, have non-instructional school employees cover classrooms, and even shut down face-to-face instruction and switch to remote learning modes, which leaves students in less-than-ideal learning environments when not implemented properly.

Because of this shortage of qualified teachers, some classrooms are being led by staff who — while dedicated to caring for our students — lack appropriate knowledge and skills to deliver instruction. Shortages of qualified teachers disrupts the learning environment; further marginalizes students of color, students with disabilities, and students from low-income families; and limits the development of positive relationships between students, families and teachers.

I know this as someone who is in close contact with school districts, as interim dean of the College of Education and Communications at Indiana University of Pennsylvania. School leaders contact me almost daily, searching for help to fill vacant positions in classrooms.

Universities like ours and local schools are engaging in innovative efforts to address the problem, though they’re not enough. For example, we partner with some local school districts to have graduate students in our Literacy/Reading Specialist program work up to 20 hours a week as graduate assistants, while continuing to take graduate classes.

The IUP students are already state certified and can help K-12 students by serving as literacy instructors, assisting teachers in the classroom, and serving as substitute teachers. This collaboration benefits everyone. K-12 students learn from high-quality teachers, local schools temporarily fill open positions with certified educators, and IUP students get more experience and a paycheck.

Unfortunately, those efforts are not enough. Pennsylvania will need an estimated 10,000 more teachers by 2030. Meeting that demand and easing the current teacher shortage will take investment from Harrisburg.

The harsh reality is the teacher shortage will continue unless more people can afford the college education necessary to gain the skills and knowledge to become certified teachers. There are not enough people with incomes high enough to fill all the jobs. We must reduce the cost to students so more people from low- and middle-income families can become teachers, and that requires creative solutions.

Pennsylvania’s State System of Higher Education (PASSHE), which includes IUP, is asking the General Assembly for $112 million so our universities can provide more financial aid to education students and a handful of other majors with worker shortages. The investment would save each education student an average of $1,500 a year and students with high needs around $6,500 a year.

That additional direct-to-student financial aid would be life changing for many PASSHE students. Despite attending a state-owned public university, many students must work one or two jobs while taking a full course load, and they still struggle to make ends meet.

PASSHE’s proposal tackles the affordability problem by boosting university-funded financial aid to lower the price that teacher candidates pay. With the reduced cost, more students will be able to afford to start college, stay through graduation and enter the workforce. Plus, the state’s return on investment is greater because our universities already produce graduates at a lower cost per student.

Pennsylvania has a shortage of teachers, but not a shortage of great people who would make outstanding teachers. Addressing the shortage requires our state to ensure more students from low- and middle-income families can afford college teacher preparation programs. The state system’s plan strategically targets financial aid that opens the door of opportunity to more people to become the high-quality teachers that children need and deserve.

The plan is good for our students, our schools, and our communities in every corner of the state. It’s the hope and solution that Pennsylvania needs, but it requires state investment to achieve.

Fri, 02 Jun 2023 16:15:00 -0500 en text/html https://www.indianagazette.com/opinion/editorials/dr-sue-rieg-investing-in-financial-aid-for-passhe-students-can-help-teacher-shortage/article_4e489aec-a388-51bc-8c7e-50dddbf1b3df.html
Education Credit Union Highlights Work of Certified Financial Counselors

AMARILLO, Texas (KAMR/KCIT) —From getting an emergency savings account in order, to helping you get out of debt, the Education Credit Union is highlighting some of the work that their Certified Financial Counselors can do.

You can book an appointment or send a question to a counselor. This service is free.

Click here for more information.

Wed, 24 May 2023 09:36:00 -0500 en-US text/html https://www.myhighplains.com/news/studio-4/education-credit-union-highlights-work-of-certified-financial-counselors/




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