Finances Advisor Teaches Financial Security At Chautauqua Institution

Standing, Carol Clark, OnCenter Financial Advisors managing partner, teaching a class financial security at the Smith Memorial Library Thursday at the Chautauqua Institution. Clark, a chartered financial analyst with 28 years of experience, will also be teaching a free class designed for women who would like to know more about financial management in August. P-J photo by Dennis Phillips

There are seven questions to ask you financial advisor to ensure they are trying to maximize your investment portfolio and not their own.

That is one of the financial tips Carol Clark, OnCenter Financial Advisors managing partner, taught this week on financial security at the Smith Memorial Library at the Chautauqua Institution. Clark, a chartered financial analyst, provided candid, straightforward financial advice to the class that she has learned through 28 years of experience as an independent financial advisor.

Clark taught the class of participants “The Seven Critical Steps to Financial Security” that she has learned as a five-star independent financial advisor with a focus on providing clients with truly independent, ethical and transparent financial guidance. The course covered critical principles of personal finance and strategies to achieve sustainable financial security based on an individual’s values and vision. The class began with basic definitions of various types of assets and the pros and cons for each. She also discussed the importance of broad allocation across multiple asset classes to minimize correlation risk and the dramatic importance of the fee structure in long-term growth of assets. She also taught the benefits of proactive estate planning and tax minimization strategies.

The firm Clark founded, OnCenter Financial, is a registered investment advisor so there are no in-house, proprietary products to push. This allows her to give truly independent advice that benefits her clients, not a brokerage house.

“There are 308,000 financial advisors in the U.S. and 90 percent are brokers,” Clark said. “The other 10 percent are registered investment advisors, but 26,000 of the 31,000 are dually registered. This means they are both a registered investment advisor and a broker so they can’t give truly independent financial recommendations and advice. Therefore, there are only 5,000 in the U.S. who are truly independent fiduciaries.”

Clark said there are seven questions someone should ask to make sure they are working with a independent registered investment advisor. One of those questions is, “Are you a registered investment advisor?”

“If the answer is ‘no,’ this individual is a broker. You need to move on to someone else. If the answer is ‘yes,’ then this person is required by law to be a fiduciary, but you still need to find out if this fiduciary is wearing one hat or two,” she said.

Clark said the second question is, “Are your or is your firm affiliated with a broker-dealer?”

“If the answer is “yes,” this individual can act as a broker and can steer you to specific investments. One easy way to figure this out is to look at the bottom of the advisor’s website or business card. If it says something like ‘Securities offered through (advisor’s company name), member (Financial Industry Regulatory Authority and the Securities Investor Protection Corporation respectively) it means that he/she can act as a broker. You need to move on to someone else,” she said.

Clark said one of the most important question to ask your financial advisor is, “Do you or your firm receive any third-party compensation for recommending certain investments?”

“The answer needs to be no,” Clark said. “Because you need to know that your advisor has no incentive to recommend products that will provide them with commissions, kickbacks, consulting fees, trips or other expensive prizes.”

Clark said this is the fourth year she has taught a financial services class at Chautauqua Institution. She plans to return later this year in August to the Chautauqua Institution to teach a class designed for women to help them with understanding financial responsibility.

“In some cases, not all, women have been in a situation where their spouse has handled the financial responsibilities and they can be intimidated by financial situations,” she said. “Many of them don’t know how to find someone to count on and what questions to ask. I want to educate them to make them more comfortable with financial decisions.”

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