Why hire a CFP?
CFP® marks are recognized in the United States and a number of other countries for its (1) high standard of professional education; (2) stringent code of conduct and standards of practice; and (3) ethical requirements that govern professional engagements with clients.
To attain the right to use the CFP® marks, an individual must satisfactorily fulfill the following requirements: Education – Complete an advanced college-level course; Examination – Pass the comprehensive CFP® Certification Examination; Experience – Complete at least three years of full-time financial planning-related experience (or the equivalent, measured as 2,000 hours per year); and Ethics – Agree to be bound by CFP Board’s Standards of Professional Conduct.
Individuals who become certified must complete 30 hours of continuing education hours every two years and renew an agreement to be bound by the Standards of Professional Conduct in order to maintain the right to continue to use the CFP® marks.
CFP® professionals who fail to comply with the above standards and requirements may be subject to CFP Board’s enforcement process, which could result in suspension or permanent revocation of their CFP® certification.
What’s so important about having a financial plan?
Everyone has goals that they want to achieve during their lifetime. And some of the major goals are financial-based. Goals such as-when can I retire? Will I run out of money before I die? Can I fulfill my children’s needs, such as education, to assure them of financial success? What can I leave behind for my loved-ones? The best way to increase your chances of fulfilling your financial goals is to have a comprehensive financial plan. A plan documents what exactly are your goals and the steps it takes to achieve them. Once a plan is developed, then you have a roadmap to follow for achieving financial success. And also you have something that can be updated to reflect the most current assumptions and can change the ways to achieve your goals with these new assumptions. A plan “lives” with you for the rest of your life, showing a constant light on your path to financial independence.
What is asset allocation and why is it important?
Allocating assets (a.k.a your investments) across multiple asset classes, such as stocks, bonds and cash, has been proven to be the single most important factor in portfolio management to achieve optimal performance. A portfolio's asset allocation also defines the risk profile that the portfolio has, and therefore should change as investors age and as their risk appetite changes.
What’s so big about a diversified portfolio?
Diversification in a portfolio has been proven to reduce the riskiness of the portfolio. The risk in a portfolio of diverse individual stocks and/or bonds will be less than the risk inherent in holding any one of the individual stocks or bonds(provided the risks of the various positions are not directly related). Consider a portfolio that holds two risky stocks: one that pays off when it rains and another that pays off when it doesn't rain. A portfolio that contains both assets will always pay off, regardless of whether it rains or shines. Adding one risky asset to another can reduce the overall risk of an all-weather portfolio,
What’s so bad about market timing?
Trying to time the market-usually meaning selling right before the market falls-is very hard to do and the chances for success are small. No one has knowledge of the future, and moving in and out of the market based on events is just a crap shoot. Studies prove that missing just a few days of the year can have drastic impacts on portfolio performance. It takes discipline and a strong will at times to look beyond the chaos, but better investment performance can be achieved by staying invested than jumping in and out.
Why is re-balancing important ?
Re-balancing your portfolio, the on-going adjustments to keep the portfolio at your asset allocations targets, assures that your portfolio is not moving away from its designated risk allocation. Also doing this can reap the benefits of "buying low and selling high" since you are selling your winners-that could be at their top-and replacing them with positions that haven't done as good but are likely to have more gains in their future than the ones you just sold.
What is a fiduciary? Why is this important?
The fiduciary manages assets for the benefit of the other person rather than for his or her own profit. Therefore investors are assured that the recommendations they get from their advisor is in their best interest and not the advisor's. KMR Financial Advisory, as a Registered Investment Advisor, is required to act as a fiduciary with clients assets. Also, KMR Financial Advisory is a fee-only firm and collects no commissions or incentives from its services.