Changing Trajectories: How Financial Planning Gets Black People on Track

By Bria Owers,
words in black

It’s hard to know where to turn when seeking guidance on budgeting, investing, buying a home, or even starting a business. The Internet is a great and vast resource, but it has one major drawback – it is unable to get a complete view of your finances.

Sharing financial knowledge is common in the black community, yet there is a potential danger in sharing bad financial advice that could lead someone down the wrong path.

Certified financial professionals have the necessary education, training, guidelines, and standards to provide appropriate financial advice on a variety of financial topics.

Certified financial Gerald Grant III says, “When we think about that educational component, being able to instill that knowledge, tools and habits that haven’t come from previous generations allows us to change that direction. Where we’re going.” Professionals (CFPs) at G Financial Group in alliance with Equitable Advisors.

With this in mind, the clear differences between professionals, financial influencers, or “influencers,” and financial coaches become clear. And this is an important distinction: influencers and coaches don’t necessarily have certifications or the knowledge that comes with them.

“There are licenses and rules to get into this industry, as well as some testing and designations, because you are governed,” says Grant. “And when you’re on this side of the playing field there are some rules you must follow.”

If they do not follow the rules and laws the consequences will be severe.

Proper financial advice is important for increasing financial literacy, increasing generational wealth, and being more prepared for retirement.

CFP, CPA and CFA – What are they?

Certified financial planners (CFPs), on the other hand, can take a “holistic” approach and are meant to “bring all parts of your financial life together,” according to the CFP Board, which maintains standards for planners. .

Certified Public Accountants (CPAs) can help individuals or business owners with all things related to taxes. Chartered Financial Analysts (CFA) are advanced investment and wealth management specialists.

“Typically, people look for a CPA when they want tax advice or want an audit of something like their nonprofit,” she says.

Davis says a CPA is an excellent choice for small business owners looking for help with accounting and taxes. Clients can be partnerships, sole proprietorships, C and S corporations, estates and trusts.

It’s possible to find a professional with all of these designations, but deciding who to work with depends on your individual financial needs.

A Cost-Effective Option: Financial Coaching

It is difficult to trust financial influencers and financial coaches because many do not have the same certifications and professional expertise as a CFP®. However, CFP® sometimes recommend them for those who do not meet the firm’s client requirements or cannot afford their services.

Coaches have their own limitations on what they can do and provide, due to regulations and licensing requirements. However, some accredited financial counselors have certification through the Association for Financial Counseling and Planning Education.

Davis says there are scammers on TikTok and Instagram who give bad financial advice and encourage their viewers to engage in illegal activities.

Earlier this year, ABC News reported that France became the first country to regulate influencer marketing, making it illegal to create paid content promoting financial products, including cryptocurrencies.

Researching what “influencers” advise before acting on it or talking to a certified finance expert can help combat getting poor advice.

What to look for in a finance professional?

It’s easy to work with a financial planner or professional. According to the Bureau of Labor Statistics, there are approximately 327,600 personal financial advisors in the United States.

Their services often come at a price, and as such, many offer a free consultation or introductory call to see if your needs are a good fit for their services.

Grant and Davis recommend asking some of these questions when considering working with a potential financial planner or coach.

• Who is your typical customer?
• How and why did you come into this field?
• How are your personal finances?
• What’s your money story?
• What is the mission and purpose of your firm or business?
• What are some things we aren’t thinking about or doing as we should?

Grant also has things he recommends paying attention to.

• Are they asking you questions about your home?
• Are they asking you questions about your particular financial scenario?
• Are they recommending different strategies without proper information?
• Is this someone who will have my best interests in mind? Or are they telling me what I want to hear?
• Will they educate me about the options available?

“I would say it’s like going to the doctor,” he says. “I can’t give you a complete prescription if I don’t know your needs.”

Your financial professional needs a process to figure out where your finances are, and where you want to go.

This article was originally published by Word in Black.

Source: www.bing.com