A previous version of this article appeared on Aug. 3, 2017.
Think back to the last time you bought a car. Did you buy the same car your sister owns because she likes hers? Did you shop for $16,000 Chevrolet Sparks, $100,000 Range Rovers, and everything in between? Did you head into the dealer with no knowledge of prices, fuel economy, or vehicle safety features?
Heck no, right? Buying a car isn't for Sunday drivers, so you no doubt started the process by thinking about your needs, wants, and budget. You then homed in on two or three vehicles that fit your criteria. You probably did a little bit of homework, reading up on which cars receive the best ratings and taking a test drive or two. Only then did you steel yourself for the trip into the dealer to make the buy, praying for the shortest, most painless car purchase possible.
What's surprising is that many investors take the former tack when choosing a financial advisor, being amazingly haphazard even though, over a lifetime, their financial-advice engagement could be far more costly than a car. They begin by soliciting advice on advisors from people who may or may not know what they're talking about and who may have needs that are completely different from their own. They don't let their own needs, wants, and budget drive the process, and they often don't do much homework.
A key reason is that the financial advisory profession is an awfully big and confusing tent. It encompasses people who are focused primarily on investments and those who construct comprehensive financial plans. Commission-based brokers can call themselves financial advisors, but so do many fee-only folks who never touch commissions.
The industry hasn't necessarily helped distinguish the flames of confusion. Despite efforts to require all advisors to be fiduciaries—that is, be legally bound to serve their clients' interests ahead of their own—some parts of the industry have pushed back against such a standard. Today, the financial advisory space remains a wild west of confusing titles, designations, and compensation schemes.
The good news is that selecting an advisor who's a good fit for your needs doesn't have to be an overwrought process. A lot of guides to choosing an advisor focus on questions you should ask the advisor—compensation schemes, designations, and whether the advisor is a fiduciary. Those are hugely important questions, well worth getting to the bottom of. But the real first step when seeking an advisor is to think through what you're looking for: your goals in seeking an advisor, what sort of relationship makes sense given those goals, and how much help you expect to need on an ongoing basis, among other issues. Armed with that information, you can then seek advisors who fit your self-made description.
Here are the key questions to ask yourself.
A key fissure among financial advisors is focus. Many financial advisors—often called investment advisors or wealth managers—devote a lot of time and energy to managing portfolios: determining asset allocation, selecting investments, and so forth. In fact, that may be the one and only thing they will handle for you, or they may tackle nonportfolio aspects of your financial life but do so only tangentially.
Another big contingent of advisors—financial planners—concern themselves with holistic financial planning: setting and quantifying financial goals, paying down debt, determining insurance needs, and investing appropriately for college and retirement, among other tasks. Financial planners know investments, too, but investment selection and portfolio monitoring aren't all they do.
Those distinctions may seem obvious to people inside the investment industry, but many consumers aren't aware of them. They might think of financial planning as interchangeable with investment management and advice. And it's true that the lines between the professions have grown blurrier in the past few years. Investment advisors are increasingly focused on providing holistic financial planning, as some consumers consider the investment-advice piece to be more or less a commodity and are seeking broader expertise. It's also true, as I discussed here, that investors sometimes think they have a "portfolio emergency" when in fact their investments aren't the main thing that ails their financial plans.
If you're seeking holistic planning advice: A financial planner is appropriate if you're seeking broad financial-planning guidance—on your investment portfolio, but other parts of your plan as well. Seek out those who call themselves financial planners and ask prospective planners if they've earned the certified financial planner or chartered financial consultant designation. Many financial planners are also fiduciaries; to be sure, ask the planner about that before hiring them.
If you need investment advice first and foremost: If you think your financial plan is in good shape overall but you need help selecting and overseeing your investments, an investment advisor may be the way to go. Such individuals are frequently registered investment advisors or are employed by a firm that is; these advisors and advisory firms are held to a fiduciary standard. The gold-standard designation for this type of advisor is the chartered financial analyst.
Once you've determined whether you're looking for investment advice or financial-planning advice, the next step is to consider what specific items you need help with. Decide if you're seeking advice on a few specific issues, or problem spots, in your plan, or if you expect to need ongoing assistance. Knowing whether your needs are surgical or more encompassing can help you be an efficient consumer of advisory resources.
If you're seeking advice on just a few issues: If your needs are focused—for example, you'd like a review of the viability of your retirement assets given your anticipated spending but then you'll be set for the next five years or so—you'll want to seek an advisor who is willing to work with you on a per-project basis. Financial planners are more likely to employ hourly or per-engagement billing than are investment advisors. Hourly rates for financial planners often range from $200 to $400.
If you're seeking broad and ongoing financial help: If you expect that your advice needs will be ongoing, paying a recurrent fee—say, annually—may be more cost-effective than paying for advice on an a la carte basis. Most advisors who charge in this way levy their fees as a percentage of your assets; the percentage may decrease the more assets you have under management with an advisor. Both investment advisors and financial advisors charge for services in this way; the average rate for a $1 million portfolio is 1% of assets under management, but people with larger portfolios are apt to pay less. Another model that is gaining traction is the so-called subscription model, whereby you pay your advisor a monthly or annual dollar-based fee rather than a percentage of your assets—much as you would do with a gym membership or cable TV.
In a related vein, ask yourself how much of a role you'd like to play in managing your finances going forward. Do you want to be part of the planning process and handle certain parts of your financial plan yourself, or would you like to delegate most of the decision-making?
If you're willing to handle certain aspects of your plan on your own: Obviously, the more work you're willing to do yourself, the more you should be able to shave off the advisory fees you pay. Investors who would like to do at least some of the heavy lifting for their plans should consider paying an advisor on an hourly or per-project basis rather than an all-in fee for encompassing services.
If you'd like to delegate: This setup can make sense for very busy people who simply don't have the time or inclination to participate in the planning/investment-management process. It's also something to consider for older investors who are concerned about the possibility of cognitive decline and its impact on their ability to manage their own finances or investment portfolios. Paying an advisor a percentage of assets annually or hiring one on a retainer basis can make sense for delegators.
While many advisors still meet face to face with their clients in their offices, technology is changing the advice industry fast. Robo-advisors employ computer algorithms to deliver often-very-low-cost investment advice. Most human advisors also rely heavily on various software programs to craft their client plans. Many advisors are also employing technology to facilitate interactions with their clients. For example, they may use portals to share information with their clients (and vice versa), meet with them via video conference, and respond to client queries via text message.
If you're very comfortable with technology: You may be able to shave your investment-management fees by employing some type of technology-driven advice such as a robo-advisor. Some financial planners employ a hybrid model, charging their clients for customized financial-planning advice while outsourcing the investment-management piece to a very low-cost robo-advisor.
Even if cost-cutting isn't your main goal, technology such as video conferencing can enable you to meet with advisors who specialize in a specific area, such as financial planning for small-business owners, even if they don't live in your same geographic location.
If you'd like more face-to-face interaction: Focus your search on financial advisors who work in your same locale. The website napfa.org allows you to search for fee-only financial planners by geography.
Are you a believer in the benefits that can accrue to index funds and exchange-traded funds thanks to their often-low costs and tax efficiency? Or do you like to employ actively managed funds and/or individual stocks in the hopes of beating the market? Do you want your advisor to be strategic in managing your asset allocation (that is, long-term and hands-off) or more tactical in strategy? Thinking through your investment beliefs and articulating them to a prospective advisor is a crucial step, especially if you're leaning on the advisor for ongoing investment guidance.
If you have a specific investment philosophy you'd like to see the advisor employ:If you're reading Morningstar.com, it’s a good bet that you have developed a set of investment beliefs that you'd like to see embedded in your plan, even if you're delegating the specific decision-making to an advisor. Be sure to quiz any prospective advisors of their investment approach.
If you're open to allowing the investment advisor to employ their own strategy:Even if you don't have a strong view of how you'd like your assets to be managed, it's still important to ask some questions about strategy. Is the advisor clear and transparent about the approach? Does the advisor employ low-cost funds or more-expensive ones? How much attention does the advisor pay to tax efficiency? Taking the time to understand your advisor's strategy can help you stick with the program through varying market conditions.
Registered adviser, fiduciary, independent adviser, investment adviser representative, RIA, licensed, designated, unbiased, what does it all mean? As an investor seeking an adviser, it can certainly be confounding.
Various types of licenses, designations, financial industry jargon and affiliation options are a lot for anyone to digest. Twenty-two years of helping people understand it all has led me to a profoundly simple list of questions to help you decide if an adviser is right for you. Here it is:
Five yeses to these questions will likely lead to a long-term successful relationship. It can be that simple.
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For those seeking deeper knowledge and insight, good news! I’ve broken it down here. Here are five additional aspects to consider as part of working with a financial adviser.
A representative who is registered with the Financial Industry Regulatory Authority (FINRA) brokers investments and is associated with a broker-dealer (a firm). Investments implemented by a broker are generally commissionable products, such as an A share or C share mutual fund, variable annuity, 1031 exchange product, non-traded real estate investment trusts, variable life insurance, oil and gas partnerships and real estate limited partnerships. The advice they deliver must meet the suitability standard, meaning the investment must be suitable for the investor, but not necessarily the best (or least costly) choice for them.
An Investment Adviser Representative (IAR) generally works for a flat fee for planning and advice or for a percentage of assets under management. There is no commission involved, and the IAR works as fiduciary, meaning the adviser has an ethical duty to recommend the best investments for you.
An IAR can be associated both with Registered Investment Adviser and maintain a license with a FINRA registered broker-dealer. Or, with a stand-alone RIA that does not have a FINRA registration and therefore the adviser does not have a FINRA license (see explanation 2 below).
Now that we know to ask if an adviser is FINRA licensed and whether s/he is an IAR for a broker-dealer’s RIA or stand-alone, it’s time to evaluate an adviser’s FINRA license, if applicable. This is public information and can found by entering his/her name on the Broker Check site: https://brokercheck.finra.org/ (opens in new tab). Two common licenses obtained to implement investment solutions are the Series 6 and Series 7. If an adviser has his/her Series 6 then they can deal with variable investments (investments tied to the stock markets) but are limited to mutual funds and sub accounts inside variable insurance products.
A Series 7 licensed professional registered with a broker-dealer will be able to offer a substantially wider scope of investments, including individual stocks & bonds, exchange-traded funds, private placements, non-traded REITs, and stock options. The suitability standard applies to those operating under the Series 6 and Series 7 license.
What licensure is required by investment advisers (IARs)? Unlike the Series 7 and the Series 6, an individual does not need to be “sponsored” by a broker-dealer to take the required exam. The Series 65 test was designed by the North American Securities Administrators Association (NASAA) (opens in new tab) and administered by the Financial Industry Regulatory Authority (FINRA). The Series 65 is an test and license required by anyone intending to provide financial or investment advice on a non-commission basis. Those advisers passing the Series 65 test operate under the fiduciary standard.
Let’s talk financial planning. Where does a CERTIFIED FINANCIAL PLANNER™ professional fit in with all this licensure info? In the realm of comprehensive advice and working across disciplines, the CERTIFIED FINANCIAL PLANNER™ designation is commonly held in the highest regard amongst industry professionals. Becoming a CFP® certificant is one of the most stringent processes and one of the hardest designations to obtain in terms of the financial advice industry. It requires years of experience, successful completion of standardized exams, a demonstration of ethics, a formal education and ongoing continuing education. A CFP® professional active in the practice of charging clients for advice will at least have his/her Series 65 and operates as a fiduciary.
There have been steps taken to curb bias and unsuitable recommendations from FINRA registered representatives. One sweeping legislation was Reg BI, which can be read about on FINRA’s website (opens in new tab). These stringent regulations have influenced many advisers to drop their Series 7 and work only as an IAR through an independent RIA.
It is arguable that there is less oversight of RIAs by the SEC or the states, and therefore there are fewer compliance eyes on the recommendations and solutions being offered. While IARs still want to bring advanced solutions to their clients that have traditionally been vetted by a significant due diligence team at a FINRA registered broker dealer, smaller RIAs may not have the financial capacity or legal experience to vet investment offerings as thoroughly. Be certain to inquire about the legal and due diligence process involved in vetting any specific investment, especially those that aren’t open to everyone in the investing community.
Hiring an adviser with the intention that he/she and their team eventually earn the role of your trusted adviser is an important one. Whether you take the profoundly simple list of questions to ask yourself and the potential suitor or take a much deeper approach, having some knowledge will be helpful and should add value in assisting with your decision.
Jeremy DiTullio is a registered representative of Lincoln Financial Advisors Corp., a broker/dealer (member SIPC) and registered investment advisor. Cleveland Financial Group® is a marketing name for registered representatives of Lincoln Financial Advisors Corp. CRN-4636401-032322
The Master of Financial Analysis degree is a 33 credit program that can be taken on a full or part-time basis. This is a lock step program for full-timers, meaning students will take the same set of academic classes. Students will take five courses in the Fall and five courses in the Spring.
Part-time students have up to 4 years to complete the program and must take the same set of classes in their first and second semester. After that, they are free to take the remaining classes at their own pace, within the maximum time frame. Part-time students are accepted in both the Fall and Spring semesters. Students must complete an Accounting for Managers course before the first semester.
The CFA exams are only given in English. In addition, English is the language of business. Our program is designed to not only prepare students academically, but the program also provides a way for students to Improve their English proficiency. By taking our Summer Intensive Business English (SIBE) program, successful students should perform better in their finance classes as well as on the CFA exams. Our SIBE program focuses on strengthening English speaking, writing, listening, and reading skills, while expanding practical skills such as professional networking, public speaking and giving presentations, analyzing business publications, conducting meetings, interviews, and negotiations, writing persuasively, and other critical proficiencies. All international students required to take the TOEFL will be required to attend our 6 week (25 hours per week) SIBE program. Students will be placed in SIBE classes based on their level of English proficiency from lower intermediate to advanced. International students, exempted from taking the TOEFL (see Admissions) will still benefit from taking the summer intensive English coursework and are strongly urged to do so.
For more information about our SIBE program, please click here.
No. The MFinA program, like all accredited degree programs at Rutgers Business School, provides you with an education not training. The courses are rigorous and teach students to assess and solve problems. The CFA designation certifies to employers that you have the ability to add value to your firm. Many different types of firms value applicants who are proceeding toward the CFA designation. As a result the following list of what jobs CFAs do (source CFA Institute) reflects the value of our degree and the designation to a diverse set of company types:
For international applicants who have not studied at an American university for 2 or more years or have not taken an American financial accounting class in the last 3 years, classes start at the beginning of July.
For international applicants who have studied at an American university for 2 or more years and have taken an American financial accounting class in the last 3 years, you will attend the International Student Orientation at the end of August.
For US citizens or permanent residents, classes begin on the first day of the fall term.
Our 20 month Part Time program only starts in the fall. Our flex part time program starts in either the fall or spring.
Note that US government visa rules require international students studying in the US to attend full time. Therefore our part time programs are only available to US citizens and permanent residents.
Yes. A part-time option is available and geared toward working professionals with at least two years of work experience. Our 20 month Part Time program only starts in the fall. Our flex part time program starts in either the fall or spring.
Note that US government visa rules require international students studying in the US to attend full time. Therefore our part time programs are only available to US citizens and permanent residents.
The Rutgers MFinA full-time program is taught at Rutgers Business School's $85 million building on the Livingston campus, one of five campuses that make up Rutgers University-New Brunswick, a secure, suburban campus in rural New Jersey. Students interested in the part-time program have the option of taking courses on the Livingston campus, on the Newark campus and any satellite campus locations.
Students in this program are eligible for financial aid and assistance that are currently available to all graduate students (i.e. state and federal loans and grants). We offer a small number of $5,000 merit based scholarships to deserving enrollees. We do not offer teaching assistantships or graduate assistantships at this time.
The Master of Financial Analysis degree is designed to cover over 70% of the material covered on the Chartered Financial Analyst (CFA) Level I exam. As stated on the CFA Institute website:
"The CFA Program is a globally recognized, graduate level curriculum that provides a strong foundation of real-world investment analysis and portfolio management skills along with the practical knowledge you need in today’s investment industry. It also emphasizes the highest ethical and professional standards."
For more information on the CFA designation, visit the CFA Institute website.
Yes. There are graduate student dorms on both the Livingston and Busch campuses. To find out more information about campus housing including rates click here. Information on dining services can be found by clicking here. A good overview on life at Rutgers as a graduate student can be found by clicking here.
We will run a non-credit short course on ethics during the program. The course will be held on a Friday so that your other classes are not impacted. To prepare for the ethics portion of the test you should attend the 7 hour non-credit ethics class.
Level I of the CFA exams is given in December and June. It is anticipated that graduates of the MFinA program will take the Level I test in June following graduation.
Once your coursework is finished in May, we have arranged for the Chartered Financial Analyst Society of New York (CFASNY) to hold a four day boot camp on our New Brunswick campus. This "boot camp" will bring together all of the courses you have learned in your coursework. The CFASNY is a member institution of the CFAI. They have been offering review classes for over 25 years. All review classes are taught by CFA charter holders. For more information click here.
If, in the 3 years prior to the beginning of the fall term, you have completed a financial accounting class at an Association for the Advancement of Collegiate Schools of Business accredited university, that class will replace the Accounting for Managers class taught in the program. Students will receive advanced standing and are waived from being required to enroll in the class. This will decrease the required credits from 33 to 30. All other courses must be taken at Rutgers Business School.
The Career Management office provides career-related counseling, resources, and programs to help current MFINA students and alumni to clarify career goals, establish career plans, and develop job-search skills. We build relationships with alumni, employers, and other career offices to optimize career opportunities while also creating strategic partnerships with our stakeholders.
In addition, the career management office established a partnership with an immigration law firm to provide our employers with set fees and resources for obtaining work visas and employment-based permanent residence options. RBS established a partnership with The Chinese Finance Association, which provides mentoring and professional networking opportunities for current MFINA students.
The strongest job growth for CFAs is in the Asia- Pacific region. While only 15% of CFA charter holders are from the Asia-Pacific Region, nearly 45% of those registered to take the CFA exams were from the same region indicating strong interest in obtaining the CFA designation in Asia and the Pacific Rim.1 Matthew Richards, CFA, in a 2006 article in the Financial Times2, points out that while in the US 25% of the employees in jobs for which the CFA is a credential are CFAs - that number is only 2% in China and India. This indicates very strong prospects for CFAs in those countries.
We expect many of our students to obtain jobs in the Asia/Pacific Rim area. Resources that can help you achieve jobs in that region are available at CFA Career Services, including Job Line - a CFA exclusive job board service to apply for top investment jobs throughout the world. Students are urged to join the CFA Institute as candidates and obtain the "CFA Career Guide For Asian Pacific Region."
1 Source CFA Institute
2 "Crouching tiger hidden dragon - CHARTERED FINANCIAL ANALYST: India and China are likely to leap to prominence in the world of staff trained in finance", by Matthew Richards CFA, Financial Times, June 19, 2006, page 6.
MFINA graduates from the Class of 2019 reported a 53% employment rate* within 6 months of graduation. Note: based on 95% response rate.
MFINA graduates from the Class of 2018 reported a 70% employment rate within 6 months of graduation. Note: based on 95% response rate.
*Placement rate defined as the percentage of graduates who either return to home country to work or obtain employment in US within 6 months of graduation.
The United States Citizenship and Immigration Services (USCIS) allows graduate students with F-1 visa status, and who have been pursuing a degree for more than nine months, to work to obtain practical training in their field.
Optional Practical Training (OPT) is temporary employment directly related to an F1 student’s major area of study and is commensurate with the level of education being sought. An F1 student may be authorized 12 months of OPT for study at one education level and may become eligible for another 12 months of OPT after changing to a higher educational level. An F1 student with a degree majoring in science, technology, engineering, or mathematics (STEM) may apply for extension of an additional 24-month OPT while in a valid period of post-completion OPT. Students in English language training programs are ineligible for practical training.
Yes. The United States Citizenship and Immigration Services (USCIS) allows graduate students with F-1 visa status, and who have been pursuing a degree for more than nine months, to work to obtain practical training (OPT) in their field. The USCIS allows graduates of certain programs to have an additional 24 months of OPT beyond the normal 12 months. These programs are called “STEM” programs and our program qualifies as a STEM degree. As a result of the MFINA STEM designation, students that graduate from the Rutgers Master of Financial Analysis program are eligible to work with a student visa for up to 36 months following graduation.
As a new student, you would need to come into the U.S. and report to Rutgers to activate your SEVIS record and legal status. If you are enrolled for the summer/fall, and unable to come to the U.S., your F-1/J-1 record would need to be deferred to the start of the next semester. You may be able to begin your program from overseas if your department/school provides remote instruction options, but your immigration status would only be activated when you are able to enter the U.S.
More information about delayed enrollment, as well as possibly beginning Rutgers enrollment and courses while abroad (using online or other methods), will be outlined in future communications.
ADV is a form that professional investment advisors are required to submit to the Securities and Exchange Commission (SEC) and state securities authorities, which must be updated annually. The form specifies an advisor’s investment style, assets under management (AUM), and the key officers of their advisory firm (if applicable), among other information.
Today, many consumers have little understanding of finances. In fact, a lack of financial understanding may underscore why many Americans struggle with saving and investing.
Every few years, the Financial Industry Regulatory Authority (FINRA) issues a short financial literacy test as part of its National Financial Capability Study. The test measures consumers’ knowledge about interest, compounding, inflation, diversification, and bond prices. Generally speaking, the study found that performance on the test correlated with key indicators of financial capability. On the most latest test, just over a third of respondents got four or more questions out of five correct, suggesting widespread financial illiteracy.
Some changes in consumer habits and financial products have made it harder for Americans to manage their finances. In the past, most people used cash for daily purchases. Today, they use credit cards more frequently. In 2019, credit use accounted for 27% of payments, up from 24% in 2017. The way we shop has also changed. Online shopping is now the top choice for many, which can make it easy to use and overextend credit, an all-too-convenient way to accumulate debt quickly.
Meanwhile, credit card companies, banks, and other financial institutions are inundating consumers with credit opportunities—the ability to apply for credit cards or pay off one card with another. Without the proper knowledge, it is easy to get into financial trouble.
Financial planning is long term, and people cannot depend on one-time windfalls such as the $1,400 stimulus checks distributed as part of the American Rescue Plan. Instead, individuals need to shore up their financial knowledge to manage their day-to-day financial lives while also taking a longer view for the future.
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There are skills you must master in order to thrive:
Financial literacy combines financial, credit, and debt management knowledge that is necessary to make financially responsible decisions—choices that are integral to our everyday lives. Financial literacy includes paying off debt, creating a budget, and understanding the difference between various financial instruments. In sum, financial literacy has a material impact on families as they try to balance their budget, buy a home, fund their children’s education, or ensure an income for retirement.
A lack of financial literacy affects people in advanced economies as well as economically emerging or developing economies. From Brazil to Bulgaria to India, nations around the world are faced with consumers who do not understand financial basics.
Though financial literacy may vary with education and income levels, research shows that highly educated consumers with high incomes can be just as ignorant about financial issues as less-educated, lower-income consumers (though in general, the latter do tend to be less financially literate).
At the same time, for many people, thinking about personal finances is often anxiety-inducing. People reported that choosing the right investment for a retirement savings plan was more stressful than a visit to the dentist, according to the Organisation for Economic Co-operation and Development (OECD).
Compounding the problems associated with financial illiteracy, financial decision-making is likely getting more onerous for consumers. Four trends are converging that demonstrate the importance of making thoughtful and informed decisions about finances.
When it comes to financial literacy, the playing field is far from level. Even amid the economic growth and strengthening employment of the past decade, the FINRA study found that the gap between haves and have-nots may be widening. The study also revealed disparities among different ethnic groups, with White and Asian adults showing more proficiency than Black and Hispanic survey respondents. White and Asian adults correctly answered 3.2 of the study's six questions. Hispanic adults answered 2.6 of the six questions correctly, and Black adults were able to answer 2.3 questions correctly.
This disparity shows up among younger people as well. According to a 2018 PISA study, White and Asian 15-year-olds had relatively higher financial literacy scores than the overall U.S. average of the students tested. However, Hispanic and Black students had relatively lower scores.
Retirement planning is an example of the increasing responsibility Americans must take for their own financial security. Past generations depended on company pension plans, now known as defined-benefit plans, to fund the bulk of their retirement. These pension funds, managed by professionals, placed the financial burden on the companies or governments that sponsored them. Consumers were not involved with the decision-making, rarely contributed to their own funds, and were rarely aware of the funding status or investments held by the pension.
Today, pensions are more a rarity than the norm, especially for new workers. Instead, employees are usually offered the opportunity to participate in 401(k) plans or 403(b) plans, in which they need to decide how much to contribute and how to invest the money.
Social Security was a major source of retirement income for past generations, but the benefits paid by Social Security today no longer seem adequate for many people. What's more, the Social Security Board of Trustees projects that by 2033, Social Security's Old-Age and Survivors Insurance (OASI) Trust Fund (the source for retirees' benefits) may be depleted. There are a variety of proposals for shoring up Social Security, but the uncertainty only increases the need for individuals to adequately save and plan for their retirement years.
The 2022 Investopedia Financial Literacy Survey found that Millennials and Gen Z plan to rely on 401(k)s while Gen X and Boomers plan to rely on Social Security. The survey also found that younger generations also plan to include cryptocurrency in their retirement plans as well.
Saying the Social Security Trust Fund will be depleted by 2033 doesn't mean it's bankrupt and that payouts will immediately cease. Rather, it means its reserves will be depleted, so that only 76% of benefits will be payable at that time.
Consumers are now often asked to choose from various investment and savings products. These products are more sophisticated than they were in the past, requiring consumers to select from different options that offer varying interest rates and maturities, decisions they often are not adequately educated to make. These choices can impact a consumer’s ability to buy a home, finance an education, or save for retirement, adding to the decision-making pressure.
Longer lifespans mean we need more money for retirement than earlier generations did.
Then, too, the number of institutions offering products and services can be daunting. Banks, credit unions, insurance firms, credit card companies, brokerage firms, mortgage companies, investment management firms, and other financial service companies are all vying for assets, creating confusion for the consumer.
The financial landscape is dynamic. Now a global marketplace, it has many more participants and many more influencing factors. The quickly changing environment created by technological advances, such as electronic trading, makes financial markets even swifter and more volatile. Taken together, these factors can cause conflicting views and difficulty in creating, implementing, and following a financial roadmap.
From day-to-day expenses to long-term budget forecasting, financial literacy is crucial for managing these factors. As mentioned above, it is important to plan and save enough to provide adequate income in retirement while avoiding high levels of debt that might result in bankruptcy, defaults, and foreclosures.
Yet, in its Economic Well-Being of U.S. Households in 2020 report, the U.S. Federal Reserve System Board of Governors found that many Americans are unprepared for retirement. Over one-fourth indicated they have no retirement savings, and fewer than four in 10 of those not yet retired felt that their retirement savings are on track. Among those who have self-directed retirement savings, more than 60% admitted to feeling low levels of confidence in making retirement decisions.
Low financial literacy has left Millennials—the largest share of the American workforce—unprepared for a severe financial crisis, according to research by the TIAA Institute. Even among those who report having a high knowledge of personal finance, only 19% answered questions about fundamental financial concepts correctly. Forty-three percent report using expensive alternative financial services, such as payday loans and pawnshops. More than half lack an emergency fund to cover three months’ expenses, and 37% are financially fragile (defined as unable or unlikely to be able to come up with $2,000 within a month in the event of an emergency).
Millennials also carry large amounts of student loan and mortgage debt—in fact, 44% of them say they have too much debt.
Though these may seem like individual problems, they have a wider effect on the entire population than previously believed. All one needs is to look at the financial crisis of 2008 to see the financial impact on the entire economy that arose from a lack of understanding of mortgage products (creating a vulnerability to predatory lending). Financial literacy is an issue with broad implications for economic health.
Financial literacy is the knowledge and application of various financial skills. These may include creating a budget, understanding how credit works, and saving for retirement. Financial literacy includes understanding different financial instruments, such as stocks, bonds, ETFs, and creating an investment plan.
Financial literacy is important not only because financial literacy provides a foundation for informed financial decision-making, but because financial responsibility is increasing. In the past, for instance, employers would manage employees' retirement accounts. Today, the individual assumes more of this responsibility via self-directed retirement accounts.
In addition, the scope of financial products has broadened and credit is more widely accessible, placing more choices in the hands of consumers.
One example of financial literacy is the management of day-to-day expenses. Consider a person who has an income of $3,000 each month. If they managed their expenses properly, they would keep their expenses at no higher than $3,000 to avoid going into debt.
Any improvement in financial literacy will have a profound impact on people and their ability to provide for their future. latest trends are making it all the more imperative that consumers understand basic finances because they are now asked to shoulder more of the burden of investment decisions in their retirement accounts, all while having to decipher more complex financial products and options. Becoming financially literate is not easy, but when mastered, it can ease life’s burdens tremendously.
No. You are only required to have an undergraduate degree in accounting.
Students who complete their undergraduate degree in accounting from schools other than Rutgers and The College of New Jersey (TCNJ) are required to submit a GMAT score with their application.
If you complete and/or are completing your undergraduate degree in accounting from Rutgers or The College of New Jersey (TCNJ), you are not required to submit a GMAT score as long as your cumulative GPA at the time of submitting your application is at least a 3.0. If you are a Rutgers student and your GPA falls below a 3.0, you must submit a GMAT score as part of the application process.
The GMAT is waived for applicants who have successfully completed all four parts of the CPA test and can provide a letter from the licensing jurisdiction indicating completion of all four parts of the exam.
If you have successfully completed other professional licensing requirements (e.g., The Law Bar exam, Chartered Financial Analysts, Certified Management Accountant, etc.) you may petition the program director for a waiver of the GMAT requirement.
The average GMAT score is 550.
No. RBS and The College of New Jersey (TCNJ) accounting students with GPAs in excess of 3.0 are not required to submit two letters of recommendation with their application.
Yes, but an applicant with an undergraduate degree in something other than accounting must have completed the 24 credit hours of accounting courses required to be considered an accounting major.
The prerequisite accounting courses are as follows:
All prerequisite courses have to be completed prior to admission into the financial accounting program.
Yes. There are two options for taking the program:
No. Calculus and statistics are not required to be admitted into the financial accounting program.
The following documents must be submitted to the Graduate Admissions Office by Rutgers Business School and The College of New Jersey (TCNJ) for accounting undergraduates:
Yes. However, the five core courses are only offered during the summer semester on campus. The accommodation is to allow students to split the courses over two summers. We would, however, expect the employer to confirm their support for the student's participation in the program.
No. However, if admitted into the financial accounting program, we highly recommend you take both the Governmental Accounting & Auditing and Ethics in Business courses unless you took an equivalent course in your undergraduate studies.
Elective courses are typically taken online, but also may be taken in a formal classroom setting. Formal classroom courses must be approved by the program director and can be taken either on the Newark or New Brunswick campuses.
International students (F-1 holders) are required to take three courses in the classroom.
Online courses offered in the Master of Accountancy in Governmental Accounting program may also be taken. Examples of such courses are:
A full-time student in the Rutgers Business School is defined as a student who takes a minimum of 12 credit hours.
There are no scholarships available to students admitted into the financial accounting program. There is, however, a financial aid program set up by the Financial Aid Office. For more information, please contact:
Last names A-D: Vanessa Galindo
Last names E-L: Martha Arevalo
Last names M-R: Urvi Khandhar
Last names S: Nicholas Ramjattan
Last names T-Z: Maria Correia
Due to the nature of the program, there are no TA positions available in the program.
There are two ways that employers fund the education of their employee's education—direct billing or tuition reimbursement.
Direct Billing – The student is issued a voucher from the employer with the indicated tuition benefit the employer is providing for the semester. The student submits the voucher to the Rutgers Billing Office. The Billing Office will then prepare an invoice and submit it to the employer for payment. The employer does not have any stipulations for payment (e.g., grades).
Tuition Reimbursement – The student pays the term bill by the due date for the semester. At the end of the semester, after grades are submitted, the student submits a tuition reimbursement request to his/her employer. The employer reimburses the student for the indicated tuition benefit, provided the student meets the stipulation in the employer's tuition reimbursement program (e.g., attainment of a certain grade level).
In the event that the employer provides the student with a tuition reimbursement option, the student must pay tuition up front (by the billing due date for the semester) and manage the reimbursement process separately with his/her employer.
Yes. An undergraduate student interested in applying for the financial accounting program may request special permission to take a graduate elective. Restrictions apply.
No. While most students complete the requirements of the financial accounting degree within a year after beginning the program, the program is flexible and permits students who may have work conflicts to arrange their classes around those conflicts. A student who fails to register for any courses for three consecutive semesters must formally notify the senior program administrator and registrar of their plans for program completion.
No. You can not take online courses on a non-matriculating basis. These courses are limited in size and to students who have been formally admitted to program.
Yes, summer housing is available for students admitted into the financial accounting program. Information on summer housing may be obtained by sending a request for information to oncampus@rci.rutgers.edu.
New students are registered for the summer core classes by the program administrator during orientation.
The summer core classes are taught on the New Brunswick (100 Rock) campus.
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Financial Advisors Put Their Practice to the Test with Envestnet's Intelligent Financial Life(TM) Advisor Practice Score
Oct 04, 2022 (PRNewswire via COMTEX) -- PR Newswire
BERWYN, Pa., Oct. 4, 2022
Industry-first interactive assessment shows high-scoring advisors significantly outperform low-scoring peers in total client assets managed
BERWYN, Pa., Oct. 4, 2022 /PRNewswire/ -- At a time when traditional financial planning has become table-stakes and clients increasingly seek holistic advice, Envestnet is helping financial advisors understand just how well they stack up. Through a partnership with the financial services research and advisory firm, Aite-Novarica Group; Envestnet has launched the industry's first financial advisor assessment - The Intelligent Financial Life Advisor Practice Score - evaluating to what degree an advisor is helping clients' achieve peace of mind and financial security regarding their ability to meet all their financial needs and goals. Critically, the assessment yields insights on how an advisor can deliver even greater value and achieve higher levels of client satisfaction to help them grow their practice.
The Intelligent Financial Life Advisor Practice Score interactive assessment can be viewed here.
"Our mission has always been to help advisors make sense of their clients' overall financial picture and empower them to take the advice they give--and their practice--to the next level," said Mary Ellen Dugan, Chief Marketing Officer for Envestnet. "This assessment provides advisors with a way to understand how well they're positioned to help clients navigate their complex financial lives - through their day-to-day and more long-term financial decisions. By expanding their planning approach, advisors can help clients feel more secure in their ability to meet current and future financial obligations."
The accompanying white paper, "Taking the Measure of Advice: The Intelligent Financial Life Advisor Practice Score and How it Benefits Advisors' Practices," analyzes a range of advisor behaviors and capabilities and uncovered five categories that are used to calculate the Advisor Practice Score:
For advisors, there is a high correlation between achieving a top Advisor Practice Score and managing more client assets. Advisors with a score of 80 or higher manage $443 million in client assets on average - representing 69% more assets then their counterparts who scored in the bottom quartile of the survey, with a score lower than 67.
Methodology
In Q4 2021, Aite-Novarica Group conducted an online study on behalf of Envestnet with 483 professional financial advisors to examine how financial advisors are helping their clients achieve a concept Envestnet developed called "The Intelligent Financial Life" - a unified ecosystem to connect every facet of investors' finances through data driven advice, solutions, intelligence and technology - and to quantify how advisors and their practices benefit from the delivery of this concept to their clients. The survey asked advisors detailed questions about their practice, the nature of their client base, and how they worked with clients. Through analysis of the survey data, Aite-Novarica Group made a quantitative assessment of the extent to which each advisor was delivering financial wellness to clients.
The data for the full trial has a 4-point margin of error at the 95% level of confidence; statistical tests of significance among segments were conducted at a 90% confidence level.
To learn more visit https://www.envestnet.com/intelligent-financial-life.
About Envestnet
Envestnet refers to the family of operating subsidiaries of the public holding company, Envestnet, Inc. (NYSE: ENV). Envestnet is Fully Vested(TM) in empowering advisors and financial service providers with innovative technology, solutions, and intelligence to help make financial wellness a reality for their clients through an intelligently connected financial life. More than 105,000 advisors and over 6,500 companies--including 16 of the 20 largest U.S. banks, 47 of the 50 largest wealth management and brokerage firms, over 500 of the largest RIAs, and hundreds of FinTech companies--leverage Envestnet technology and services that help drive better outcomes for enterprises, advisors, and their clients.
For more information, please visit www.envestnet.com, subscribe to our blog, and follow us on Twitter (@ENVintel) and LinkedIn.
Media Contact:
Dana Taormina
JConnelly for Envestnet
envestnetpr@jconnelly.com
(973) 647-4626
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SOURCE Envestnet, Inc.
COMTEX_415896184/2454/2022-10-04T08:28:10
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The ability of more than 300,000 financial advisors to continue working as independent contractors under a proposed Labor Department rule will hinge upon how much control they can prove they have over their day-to-day business decisions.
The agency issued a proposed rule on Oct. 11 that's intended to prevent people who are in fact direct employees from being misclassified as independent contractors.
In general, the proposed worker-classification rule would replace looser standards adopted under the Trump administration with criteria that many think will make it harder for a worker to be classified as an independent contractor. Companies don't have to pay benefits or payroll taxes for independent contractors, because they're not technically employees. Being a so-called "direct employee" instead entitles a person to protections and benefits including the federally guaranteed minimum wage and overtime; it also obliges an employer to pay taxes into Social Security and unemployment insurance.
Independent contractors, which many broker-dealers become after starting their careers as employees at wirehouses and other firms, are exempt from all of that. Some 64% of all registered representatives, meaning brokers and advisors who work for broker-dealers, operate as self-employed independent contractors, according to the Financial Service Institute, a trade group and lobby for independent advisors. The wealth management industry had more than 612,000 registered representatives in 2021, Financial Industry Regulatory Authority data show. FINRA regulates the brokerage industry.
Mark Quinn, the director of regulatory affairs at the brokerage-support firm Cetera Financial Group, said that one of the biggest questions for anyone claiming to be an independent contractor has to do with control. For most of the important decisions that come with running an independent brokerage, it's pretty clear that advisors are the ones calling the shots.
"They set up their own offices, they hire their own staff," Quinn said. "They come and go as they please. And they focus on the projects they think are best for them."
The questions only start to creep in when it becomes a matter of complying with federal and state securities and finance rules. Quinn said Cetera Financial Group, which provides services ranging from technology support to marketing to more than 8,000 independent advisors, directs anyone operating under its banner to abide by Securities and Exchange Commission, FINRA and state regulations. One concern, Quinn said, is that such direction could be taken under the proposed DOL rule as amounting to the sort of control an employer exerts over employees.
"We're thinking that, because we say you have to follow these regulations, that will suddenly equal control," Quinn said.
Concern has long raged in industries like construction and trucking that workers are being misclassified as independent contractors and thus being deprived of things like minimum wages and overtime pay. Such anxieties have also spilled over into the so-called "gig economy"; in 2020, the ride-sharing firms Uber and Lyft and similar companies waged an extremely expensive ballot campaign to overturn California law that would have classified their drivers as employees.
Quinn said the financial planning space has at least one important distinction from those industries. By and large, he said, planners choose to become independent contractors after working as employees of large firms and building up a big enough client book to go solo.
"This isn't typically people who are new to the business," Quinn said.
In putting forward its new rule, the Labor Department said it's trying to frame the central question around whether someone is dependent on someone or something else for work.
The Trump administration's rule that's up for replacement, the department said in its proposed rule, places too much emphasis on two considerations: how much control a person exercises over her work and how much a person stands to profit or lose from her own activities and decisions. In doing so, the existing rule downplayed other factors, such as the amount of skill required for a certain type of work, the permanence of a given working relationship and whether whatever work is being performed is just one part of providing a particular product or service.
The agency is instead calling for reliance on what it deems a "totality of the circumstances" analysis giving equal weight to all those factors. In the main, the proposal would revert U.S. labor law to the system that was in place before the Trump administration. But it would also seek to provide further clarification for independent workers.
On the standard pertaining to control, for instance, the agency suggested that requirements that someone abide by federal laws or regulations should at least be taken into account. According to its proposed rule, "certain instances of control should not be excluded as irrelevant to the economic reality analysis only because they are required by business needs, contractual requirements, quality control standards, or legal obligations."
Quinn said such language is too vague to know whether formal adoption of the proposed rule would lead to the immediate disruption of advisors' business models. As has been in the case in many questions over employment status, the final word will most likely fall to the courts.
The financial services industry has stood up to court challenges over the status of independent contractors in the past. In 2012, the U.S. District Court for the Southern District of California sided with the former financial firm Waddell & Reed in a case brought by advisors who argued they shouldn't have been deemed independent contractors and should have received a minimum wage and overtime for the hours they logged at the firm. In reaching its decision, the court noted that the advisors had signed professional career agreements stating they would be independent contractors, were paid solely by commission and were free to choose their places and hours of work.
Allison Mutschler, a spokesperson for the Financial Services Institute, said the 2012 decision was a step forward for the industry because it "brought clarity and the promise of consistency in the application of the economic realities test to our members' business." Still, that court victory entailed expending a significant outlay of resources; and the industry isn't necessarily eager to take up a similar fight again.
Mutschler praised the Trump administration's employment rule for bringing further clarity.
"So the concern is that this new rule will undo the clarity and consistency of the previous rule, and that we'll be reverting to confusing and conflicting interpretations," she said.
Like many groups raising concerns, the Financial Services Institute says the DOL's 184-page rule is too wide-sweeping to reach firm conclusions about.
"We are thoroughly reviewing the proposed rule as it is imperative to preserve independent financial advisors' ability to choose to be independent contractors and provide the same level of certainty and clarity the existing rule provides independent advisors," Dale Brown, the president and CEO of the group, said in a statement. "We look forward to constructively engaging with DOL staff to ensure advisors' independent contractor status is protected."
The Financial Services Institute and other critics of the proposal have until Nov. 28 to submit comments on it. Given the normal timeline for the adoption of federal rules, Jim Coleman, the co-chair of the wage and hour compliance and litigation practice at employment law firm Constangy, Brooks, Smith & Prophete, said he doesn't expect anything to be officially in place until the end of the first quarter of 2023. Coleman agreed that the Trump administration's rule, in viewing control and opportunities for profit and loss as the deciding factors in employment matters, had at least been an attempt to make it easier to know if someone could be classified as an independent contractor.
"Now this new proposal is going back to the totality of the circumstances, none of which is dispositive or has more weight than the others," Coleman said. "It's going to make the outcomes more arguable. And anything that is more arguable tends to lead to more litigation."
