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Have questions? Email Send your question to jbarnash@smartasset.com

What Is NAPFA (National Association of Personal Financial Advisors)?

Do you have a budget? Do you follow it? If you answered no, you’re not alone. According to NAPFA, 60% of U.S. adults don’t have a budget and less than 50% of Americans have a purposeful savings plan. Luckily, financial advisors exist and can help you get out of your budget-less rut. You’ll have to be careful about who you pick, though, since not all financial advisors act in your best interest. Some act in their self-interest instead to make more money.

Find the best financial advisor for you. 

What Is NAPFA?

NAPFA is the National Association of Personal Financial Advisors. It was created in 1983 by financial advisors who were tired of the issues posed by commission-based advisor compensation. These advisors came together to create an organization that would work for clients’ best interests and not their own. Thus, NAPFA is a professional organization for fee-only financial planners. With its mission and code of ethics, NAPFA works to help consumers receive independent, objective and holistic financial advice.

NAPFA also serves a helpful and informational platform for advisors. Through NAPFA, advisors can enhance their professional skills, network, market their services and much more. Today, NAPFA has over 3,000 members across the U.S.

You don’t even have to work with a NAPFA-registered financial advisor to benefit from its services. NAPFA provides regular consumers with financial help. This includes tools, articles, advice and even a free quarterly newsletter.

What Sets NAPFA Advisors Apart?

What Is NAPFA (National Association of Personal Financial Advisors)?

It might be easy to call yourself a financial advisor, but the same isn’t true for becoming a NAPFA member. To start, advisors must already hold a certified financial planner (CFP®) designation to qualify. This title itself requires hours of education and experience in ethics and the financial industry. Further, to become a NAPFA-registered financial advisor, a candidate must submit a comprehensive sample financial plan or go through a Peer Review. Then to remain a member, advisors must complete at least 60 hours of continuing education every two years. These requirements ensure customers that a NAPFA advisor will be highly trained and competent.

The point of being a NAPFA-registered financial advisor is to guarantee holistic services on a fee-only basis. This eliminates the incentive to sell products for high commissions, ensuring unbiased advice. NAPFA advisors dedicate themselves to clients’ overall financial well-being. They work towards client-advisor confidentiality and transparency about a client’s money.

NAPFA requires its members to follow a strict code of ethics. Plus, they must take a fiduciary oath. To work as a fiduciary means to always act in the best interests of the client. This makes for a more appealing and trustworthy advisor, especially paired with their fee-only payment structure. Without commissions, advisors have less incentive to sell you a product to make money for themselves.

How to Find a NAPFA Advisor

NAPFA advisors sounds great don’t they? But now where do you find one? NAPFA makes that process consumer-friendly too, with an easily accessible advisor search tool on its website. Not only can you find the closest advisors to you, but you can filter your search based on your financial need. For example, you can choose from “divorce planning” to “estate & generational planning issues” to “planning issues for unmarried & same-sex couples” and much more.

The Takeaway

What Is NAPFA (National Association of Personal Financial Advisors)?

Finding the right financial advisor takes time. When it comes to your finances, you’re going to want the best of the best to take care of your money. For starters, an advisor with a CFP® designation guarantees a well-educated and experienced advisor. The added plus comes when an advisor is a NAPFA-registered financial advisor, further reassuring you that you’ve found the right advisor.

Tips for Finding a Financial Advisor

  • When you start your search for a financial advisor, you’re going to want to pay attention to their credentials. Unfortunately, the bar to call yourself a financial advisor is pretty low. Because of this, a number of more selective financial certifications can help you find a qualified advisor.
  • Next, you should figure out exactly what you want and need from a financial advisor. Many advisors have specialties, from divorce planning to retirement savings to budgeting. Knowing what you’re looking for will help you narrow your search.
  • Again, don’t forget to double check how your advisor makes money. There are a number of advisors who make a ton of money through commissions. While there’s nothing inherently bad about that, this kind of practice can lead to misguided and biased advice. That’s why it would really help to find an advisor associated with NAPFA.

Photo credit: ©iStock.com/monkeybusinessimages, ©iStock.com/skynesher, ©iStock.com/kokouu

Liz Smith Liz Smith is a graduate of New York University and has been passionate about helping people make better financial decisions since her college days. Liz has been writing for SmartAsset for more than four years. Her areas of expertise include retirement, credit cards and savings. She also focuses on all money issues for millennials. Liz's articles have been featured across the web, including on AOL Finance, Business Insider and WNBC. The biggest personal finance mistake she sees people making: not contributing to retirement early in their careers.
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