Need a Financial Adviser?

Pros recommend strategies for consumers in the market for a financial planner who will look out for their interests — not his.

Selecting a solid financial adviser can be as bewildering as negotiating a maze.

There are many types of investment professionals with different titles, duties, qualifications and forms of compensation. Some adhere to a code of ethics that requires them to be a fiduciary — someone who acts in the client’s best interests, not his own — but others do not. (Dodd-Frank phases in a rule requiring all financial professionals who deal with retirement planning to act as “investment advice fiduciaries,” beginning April 10 — but the Trump Administration is expected to shred that mandate.) You also have to determine the type of adviser who will best understand your needs and comfort level with risk — avoid planners who typically work with a particular range of assets that don’t match your holdings.

A good way to begin your search is to weed out the people who are not qualified to provide objective financial advice or serve as fiduciaries. Brokers, for example, buy and sell stocks, bonds, mutual funds and other products for their clients. They are not fiduciaries and are held to a lower ethical standard. They also receive commissions — payments for opening an account for a client or on the sale of a financial product by the company offering that product — and may persuade you to buy these products, whether or not you need them.

Investment advisers offer guidance on buying securities and manage them for their clients; but unlike brokers, they are generally not in the business of selling securities. They are also known as investment managers, wealth advisers, asset managers, wealth managers or portfolio managers. Registered investment advisers (RIAs) are firms registered with the Securities and Exchange Commission that uphold fiduciary standards.

A third category — financial planner — explores all your financial needs and helps you devise a plan to achieve long-term fiscal goals. “It’s important that a financial adviser be well-versed in more than just investments,” says Mitchell E. Kauffman, a certified financial planner and financial adviser at Kauffmann Wealth Management in Pasadena. “They should know tax planning, estate planning, retirement planning and managing risk. Our clients prefer someone who is more comprehensive, who can look at the whole picture instead of parts of it.”

Certified financial planners, or CFPs, are licensed and regulated by the Washington, D.C.–based CFP Board, which administers an exam to people who wish to earn the CFP designation. CFPs may provide the most objective financial advice because they are fiduciaries, many of whom earn a flat, hourly fee rather than a commission, so they have no incentive to sell their clients products they might not need.

The CFP Board’s website (cfp.net) provides a list of certified financial planners, with their specialties and compensation methods as well as contact information. The National Association of Personal Financial Advisors, a group of fee-only professionals, similarly lists its members on its website (napfa.org); you can also search the Financial Planning Association website (plannerssearch.org) for CFPs in your area. After you’ve compiled your list of names, use the Financial Industry Regulatory Authority’s (FINRA) BrokerCheck (brokercheck.finra.org) to see whether any have been disciplined for unlawful or unethical behavior.

You can now select three or more CFPs and schedule interviews with them to determine whom you should hire. During these interviews, “the most important thing you are looking for, by far, is total and honest disclosure,” Carl Richards, a financial planner in Park City, Utah, told The New York Times. “If you get the sense someone is hiding things or avoiding your questions, move on.”

Some financial planning firms prepare lists of questions for prospective clients. Leah Snell, a CFP and the partner and managing director of Pasadena-based Snowden Lane Partners, has a three-page list of detailed questions designed to unearth information about a financial adviser’s business structure and qualifications, relationship management, investment philosophy and compensation.

Percy E. Bolton, a Pasadena-based fee-only financial adviser, has a questionnaire on his website to help you determine if a prospective financial planner holds to a fiduciary standard. The final question asks the planner to sign a fiduciary oath declaring s/he will act in the client’s best interests, will not receive any money contingent on a client’s purchase or sale of a financial product and will disclose any conflicts of interest that could compromise the planner’s impartiality.

Bolton maintains that determining a financial planner’s fiduciary status and form of compensation should be paramount concerns for prospective clients. You should ask the planner if s/he charges a flat fee or works on commission and find out how much the adviser typically charges.

Other key questions include:

• What experience do you have and how does that relate to your current practice? CFPs are required to have at least three years of financial planning experience.

• What licenses, credentials or other certifications do you have?

• What services do you or your firm provide? Financial planners generally cannot sell insurance or securities without the proper licenses, and they cannot provide investment advice unless they are registered with state or federal authorities.

• What types of clients do you specialize in?

• How do you plan to manage my money? “Advisers can range in investment ideology and it is important to understand the types of investments you would likely own, the risk associated with the investments chosen and the scope of how those investment decisions are made,” explains Alexander Leu, managing director at Pasadena-based Penniall & Associates. “Clients should always understand their portfolio and be educated by their adviser along the way.”

“Planning advice is also crucial,” Leu adds. “What type of planning advice will you be getting? Will it be included in the investment management or will you be charged a separate fee?” He says his firm shows potential clients the planning advice they will receive and sets expectations for how this advice will be delivered. “It is important to know if you are getting a real financial plan or simply a CFP spitting out some basic projections via a financial-planning calculator,” he says.

• How much contact do you have with your clients? Some financial advisers meet with their clients once a year to review their investments; others may meet every three months or more frequently. If you believe you need more support, you will want to make sure your financial planner holds frequent meetings and respondsto phone calls.

• Do you work independently or with a team? Some CFPs argue that a sole practitioner will provide more personalized service than a large firm. Leu, like others, says, “Clients should be looking for a team approach and a firm with many qualified specialists …You want to make sure that the adviser you chose has … professionals around him that can provide a sounding board for collaborative advice they deliver to clients.”

• Personal characteristics: The CFB Board lists seven key traits you should expect from a financial planner: competence, objectivity, integrity, clarity, diligence, compliance and privacy.

It is important that you feel comfortable talking to your adviser and believe he or she understands your needs and goals. “One of the biggest things that is often overlooked is a person’s ability to listen,” says Kauffman. “One thing I’ve learned in my training is if I’m saying two or three sentences in a row, I need to shut up.”

“The most important thing, in my opinion, is chemistry,” says Linda K. Polwrek, a CFP in the Pasadena office of Waddell & Reed. “Do you trust this person, do you feel comfortable sharing your hopes, dreams and certain details of your life with this person? Financial planning is a very intimate process. You share not only your hopes, dreams and goals but all kinds of personal and confidential information about your health, money and financial dynamics.

“Integrity, trust, authenticity and a genuine desire to help people are paramount in an adviser,” Polwrek adds. “Trust your instincts about whether you can relate to each other.”

The Digital Burn

Streaming exercise classes are mushrooming, offering fun, convenient alternatives for home exercisers.

Until recently, fitness-minded folk have had to choose between convenience and stimulation. Working out at home is certainly more convenient than traveling to a gym or studio and working scheduled classes into your routine — and then still having to deal with finding parking, changing and showering. On the other hand, a constant diet of the same home-exercise videos can be a bore, not exactly conducive to getting you off the couch. That’s why many people prefer the stimulation of a live class, with fresh moves and other people working just as hard alongside you.

But digital technology is starting to change the home-fitness landscape. Consumers can now stream live classes (or tap extensive libraries of videos) using their smartphones, TVs, tablets and computers. Some fitness companies have devised streaming services that even enable home exercisers to interact with instructors and other students.

Bryan O’Rourke, a fitness consultant and president of the Louisiana-based Fitness Industry Technology Council, believes the rise of digital technology, combined with the growing number of people who work from home, will spur future demand for home-exercise programs. In a report titled “The Club of 2020,” O’Rourke and Greg Skloot, a vice president of Netpulse, which creates mobile apps for gyms and health clubs, predict that by 2020 exercise services ranging from virtual training and coaching to on-demand trainers dispatched to customers’ homes will be commonplace. “More and more of the fitness journey will likely happen outside the club’s wall,” they conclude. Health clubs, they add, will also rely on a hybrid of “digital and physical” experiences to attract members who are willing to pay more for the convenience and experience of exercising at home.

Some online companies offer both live interactive online classes and prerecorded videos. Peloton (peloton.com) is one of the more successful, boasting on its website that its New York facility is “the first and only cycling studio to marry boutique fitness with live home streaming.” Peloton requires a hefty upfront investment of $2,000 for its own home spinning bike (a different animal from traditional exercise bikes), which can purchased online or at a showroom — the L.A. showroom is located at the Santa Monica Place mall. The bike comes equipped with a 21.5-inch sweat-resistant screen on which thousands of cyclists can stream live classes at any one time. Other features are designed to make the cycling classes an interactive experience. Cyclists can video chat with other users while they ride, use the activity feed to check the performance of fellow riders and view the real-time leaderboard to compete with other cyclists. And once clients invest in the bike, unlimited classes are quite reasonable at $39 a month, which also includes access to a library of 3,000 videos. Peloton’s monthly cost compares to SoulCycle’s price of $30 for one in-studio class, although first-timers pay $20 and discounts are offered on bulk purchases.

Several other companies infuse live, interactive classes with dance. New York–based Ballet Beautiful (balletbeautiful.com), for example, is a ballet-inspired exercise program created by Mary Helen Bowers, a ballerina and trainer who coached Natalie Portman for her role in Black Swan and claims Taylor Swift, Gigi Hadid and Karlie Kloss among her adherents. Customers access online instruction, which includes toning exercises, stretches and high- and low-impact cardio workouts. Another site, sleektechnique.com, was founded by two London-based ballerinas, Flik Swan and Victoria Marr; Sleek Technique offers live ballet-inspired courses in addition to prerecorded instruction. And the Powhow platform (powhow.com) streams live fitness, dance and yoga classes, enabling its professional instructors — dancers, musicians and artists — to connect with students via webcam, to broadcast and stream their in-studio classes live or to upload recorded videos for students to train at a time convenient for them.

Also in the mix is Yogaia (yogaia.com), which offers more than 100 new live and interactive classes each week. Its live-streaming yoga classes allow teachers to see students and offer instruction in real time. Monthly membership rates start at a wallet-friendly $9.99. Another exercise chain, Barre 3 (barre3.com), which teaches a technique combining Pilates, barre and yoga, allows members to choose from an array of more than 250 online workouts ranging in length from 10 minutes to one hour. More expensive options permit members to receive exclusive workouts and real-time guidance from instructors. Memberships range from $15 to $55 a month. At EMG Live Fitness (emglivefitness.com), you can stream live or recorded classes in cycling, barre, kickboxing and more from numerous gyms and studios, promising variety in instruction without having to travel for it. Clients pay for only one class at a time.

Easypose (easypose.com), a Los Angeles–based yoga instruction company, goes a step further: the firm makes house calls, in addition to offering prerecorded lessons. Clients can use the company’s website or mobile app to schedule yoga sessions in their home, office or hotel, selecting the date, time, and style of yoga instruction for one to 20 people. Easypose offers a first-class deal of $40; after that it’s $60 for up to four students. The year-old company has hired about 1,000 certified yoga instructors in Southern California and the San Francisco Bay and New York metropolitan areas. Cofounder Ruben Dua says Easypose was created because “people were very frustrated with doing yoga in a studio. The yoga studios are crowded and they are very intimidating to some people, more like a fashion show. We make it accessible and affordable; it’s easier for people to participate.”

While health clubs generally expect you to show up for their live classes, some clubs maintain libraries of recorded videos for home exercisers. Crunch, for example, was the first national gym chain to offer its group fitness programs online. Members can access Crunch Live (crunchlive.com), where they can stream 85 workouts — yoga, barre, dance cardio and total-body bootcamp — for a monthly fee of $19.99. Crunch Live also offers customizable workout plans and what its website describes as “playlists to keep you motivated, on track and having fun,” as well as 15-minute “quickie” workouts for people short on time.

O’Rourke estimates that streaming exercise programs account for less than 10 percent of the current U.S. fitness market, but he expects these services will expand in the future. He adds that health clubs and other fitness providers will be challenged to “create a seamless and relevant complete-user experience for gyms or studios. Just offering streaming isn’t enough; it’s about creating a contextually useful blend of in-gym and digital experiences that are enjoyable to member customers. The bottom line is that people want personalized, engaging brand experiences in all markets.”

Customers, he says, want “enhanced experiences” to be conveniently delivered via “omni-channels” – a wide range of different platforms and devices. “What this will mean will evolve through experimentation.” But while digital home fitness continues to evolve, there already are several ways to use new technology to exercise at home. So if your New Year’s resolution is to exercise more in 2017, there’s no excuse to procrastinate. Get off the sofa and start streaming so you can feel the digital burn.