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Most young people just starting out in their careers have heard of their parents, grandparents, or friends meeting with a financial advisor. Whether for retirement planning, investment management, or college savings, a financial planner can help you design a custom plan to match your financial goals. Depending on what an advisor’s focus is and the types of clients they normally work with, a financial advisor can offer different options and levels of service.

Given the differences, when you hear an advisor say they design “custom financial plans,” what does that really mean? Honestly, the answer is less about what they mean, and more about what you should ask for—and get.



The first question you should ask a financial advisor is if they are a fiduciary. If an advisor is a fiduciary, their legal fiduciary duty means they have an ongoing obligation to put your best interests first before anything else, including their own or their firm’s interests. Ask them what qualifies them to be a fiduciary, such as how they manage client assets and how they get paid to do so. If their moral standards are their only qualifier as a fiduciary, then they are not a fiduciary. Working with a fiduciary does not guarantee results, but it can help alleviate trust barriers in the beginning as you make life-altering financial decisions.


Captive or Independent

Next, you should determine whether the financial advisor is captive or independent. If they are captive, that means that they are only allowed to utilize products and solutions from the company they work for. If a financial advisor works for an independent firm, then they have access to an abundance of investment options including stocks, fixed income, and other financial solutions. Typically, the same applies to insurance solutions. Advisors who work for captive insurance agencies can only sell that company’s insurance products, while an independent advisor can utilize numerous insurance companies and their products to fit what works best for the client with no mandate to sell one carrier or product. This does not make captive companies bad necessarily, but do you believe one company has the best solutions and strategies in every category whether it be stocks, ETFs, mutual funds, bond portfolios, alternative investments, real estate, life insurance, or annuities? It is like saying that McDonald’s has the best burgers, chicken nuggets, fries, ice cream, and service in the fast-food industry.


Type of License

To go even further in understanding what the financial advisor has to offer in terms of a truly custom financial plan, you need to understand what they are licensed to offer. Some advisors are only licensed to offer insurance solutions such as annuities, life insurance, disability insurance, and long-term care insurance. Other advisors act solely in a broker-dealer capacity, which can include charging a commission on stock trades, mutual funds, insurance, and other financial products you utilize. Instead of operating on a commission basis, other financial advisors work on a fee-based or fee-only basis, which means they are compensated based on assets under management or charge a flat fee for their work. This can be more relationship-based, in essence putting advisor and client on the same side of the table which can help clients as they navigate their financial life. And lastly, some advisors can offer all kinds of financial solutions for their clients. If you were to pick one advisor to create your custom financial plan, would you think it would be key for them to have each financial solution available for each stage in your life?


Options and Strategies

Lastly you need to understand whether your financial strategy is a cookie-cutter plan that everyone in your neighborhood has. Do you think you are in the same position as every single person at your age whether it be the amount of money you have saved, the amount of money you spend, your plans for saving for your kid’s college, the amount of money you make, your level of health or health issues, or your financial concerns in life? The correct answer is no. Each person is different and that is why it is important to have a financial plan tailored to your specific goals, needs, and risk tolerance. A custom financial plan is much more than “conservative, balanced, or aggressive” investments in a stocks, bonds, or cash portfolio. Ask the financial advisor how many different strategies they have available to craft your plan, how often are the strategies rebalanced, how they take advantage of outperforming the market, and how they make sure you do not suffer significant losses in a down market. If you do not get multiple options and answers to those questions, then you may want to find a different financial advisor.

Having a custom financial plan that is designed specifically for your goals and objectives can be life changing. Will it make your life go according to plan? Absolutely not; however, by having a custom financial plan, you may have more confidence that no matter what happens in the market or your life, you have a custom financial plan along with professional financial guidance by your side.

Remember to check these boxes when hiring a financial advisor: Are they a fiduciary? Are they independent? What are they licensed to offer me and can they plan for each stage in my life? What strategies and options do they offer to help me reach my goals? Once those questions are answered, you will know more about whether or not that financial advisor can offer you a truly custom financial plan.


If you do not have a custom financial plan in place, or think that there may be better options for your financial future, please contact PCIA of the Ozarks by clicking here or calling 417.720.4255.


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