Chris Jaccard Earns Prestigious CFA Designation and Joins a Select Few

La Jolla, CA. September 22, 2009 – Chris Jaccard, a wealth manager at Financial Alternatives, Inc. in La Jolla, CA, has earned the prestigious CFA designation.  By doing so, he has joined the ranks of a select few advisors who maintain both the CFP® and CFA marks.

He estimates he spent over 1,100 hours of study to pass the exams to attain the coveted CFA designation. Because of the rigor of the curriculum, only about one in five candidates who enter the program pass all three 6-hour examinations and successfully complete the requirements to earn the charter. 

So why would Mr. Jaccard, who already obtained the CFP® mark over eight years ago, put himself through such a grueling process? 

“In the last decade, the number and complexity of investment products offered to individuals has mushroomed, which makes choosing between them more difficult than ever,” Jaccard said. “The CFA curriculum has helped me do a better job of understanding and utilizing the drivers of valuations, investing tools, management techniques, and the broader economy.”

With a program that takes an exacting, analytical look at stocks, bonds, derivatives, and alternative investments, among other subjects, many who achieve the CFA designation go on to manage institutional money or work in corporate finance.

In contrast, the CFP® certification is more about comprehensive financial planning, helping individuals with various facets of their financial life, from personal income taxes and retirement to college and insurance planning.

The education behind the CFP® mark enables an advisor to take a big picture approach, while the CFA charter demands a much deeper understanding and application of investment tools and techniques.

Of the 59,000 CFP® certificants in the U.S., it’s estimated that only about 1,300 can also claim the CFA charter.

“A record number of individuals enrolled for the CFA exams this year,” Mr. Jaccard says. “This speaks to the unparalleled level of mistrust and uncertainty people have concerning our economy, government regulation, and the financial markets”.

About CFA Institute

CFA Institute is the global, not-for-profit association of investment professionals that awards the CFA and CIPM designations. The mission of CFA Institute is to lead the investment profession globally by setting the highest standards of ethics, education, and professional excellence. 
www.cfainstitute.org

About CFP Board

The mission of Certified Financial Planner Board of Standards, Inc. is to benefit the public by granting the CFP® certification and upholding it as the recognized standard of excellence for personal financial planning. The Board of Directors, in furthering CFP Board’s mission, acts on behalf of the public, CFP® certificants and other stakeholders.
www.cfp.net

About Financial Alternatives, Inc.

Financial Alternatives provides wealth management services to successful individuals and families – collaborating with CPAs, attorneys, and insurance brokers to create unique solutions.  Services are offered on a fee-only, fiduciary basis; advisors always act in the client’s best interest.
www.financialalternatives.com

Contact:
Chris Jaccard, CFA, CFP®
chris@financialalternatives.com
7734 Herschel Avenue / Suite L
La Jolla, CA 92037
858 459 8289

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Me, Me, Me

This economic downturn has given me an excuse to rant a little on the next generation.  Of course there are exceptions to every generalization… but I think most mid to late working age folks would agree that the millenial generation (the “me” generation) has a few shortcomings which the rest of us were trying to get accustomed to. 

Millenials are often described as super-confident; carrying a sense of entitlement about them.  They demand rigorous structure, frequent positive feedback, and believe themselves to be truly unique and special (talk about high maintenance).  Expecting to land a leadership job with meaningful work and a career track when just out of college weren’t uncommon.  In recent years, I noticed that some of these characteristics were rubbing off on the rest of us, myself included.

There’s nothing like a healthy recession to curb that sense of entitlement and serve to remind that yes, indeed, you have to work hard in order to meet your goals.

Hyper-stagflation, future real estate crises, and other meltdowns notwithstanding, I trust that we will all (re)learn a little humility as we struggle through this downturn.

In a hurry to finish your taxes?

Don’t be.  Thanks to the Emergency Economic Stimulus Act of 2008, custodians/brokers have an extra two weeks to send you a composite 1099.  So realistically you won’t even get to start your tax return until late February.  The good news is that we’ll all probably not get as many revised 1099s as we did last year.  Good luck!

Know where your money is?

What follows is an excerpt of a press release from NAPFA that I think is very relevant for investors out there:

How to Monitor Your Financial Advisor

Madoff case adds to lack of investor confidence in financial services industry and increases the need for the Securities and Exchange Commission to proactively protect investors

ARLINGTON HEIGHTS, IL (December 16, 2008) – Bernard Madoff’s Ponzi Scheme, which allegedly helped defraud investors of $50 billion, is the latest example of how the financial services industry fails to protect those they serve. The market chaos coupled with this case and apparent inability of the Securities and Exchange Commission (SEC) to monitor large financial businesses highlights the intensifying need for tougher regulation.

Until this regulation is in place and agencies in place are cracking down on unethical, fraudulent practices, investors must take the necessary precautions to ensure they are not at risk. The National Association of Personal Financial Advisors (NAPFA) offers the following advice on how to protect yourself as you work with a financial advisor.

• Know where your money is. Whether your advisor is managing your money or you are the person who signs-off on each financial decision, an independent financial institution will hold your money. This company has “custody” of your money. Make sure you know which company it is; how to contact the company, and what your account numbers are.
• Read your monthly or quarterly financial statements. The firm that has custody, typically a broker/dealer, bank or trust company (known as the “custodian firm”) is required to provide you with at least quarterly financial statements and most will provide them monthly. Read them. Most importantly, make sure that these statements are coming to you directly from your custodian firm – not from your advisor.

See the rest of the press release…

Coming home to roost…

It’s the same story that will continue to play out in coming months.  Highly risky and irresponsible decisions made by companies are coming back to bite.

The recent failure of SemGroup as described by the WSJ comes to mind.  This little known, privately held company had apparently gotten carried away with it’s futures contracts by making speculative trades (instead of hedging like it should do).  It lost over $2.4 Billion on energy contracts (yes, that’s a “B” not an M).

The company just didn’t have the liquidity to cover the losses so it folded and is now run by it’s creditors.

When I read this, a few ideas came to mind that may be worth exploring further:  Maybe the talking heads on TV are right about oil prices — that the reason they are so high is because of all the traders/speculators, and not global supply and demand imbalances;  and we, as individuals, can’t do anything about macroeconomic issues or control Wall Street, but we can curb the impact of high gas prices or a job loss by stockpiling cash in a “rainy day” fund and maintaining a suitable budget.

Confused about what the difference is between a broker and an investment adviser?

Me too! Just trying to figure out what’s happening with regulations and disclosures will only further confuse you, but here’s a list of keywords to google later: Merrill Lynch Rule, RAND Report, Cutting Through The Confusion.

There are various lobbying efforts, lawsuits, etc happening because they (huge brokers, investment advisers, consumer groups) all want a share of the “pie”. I think the main reason for the confusion has to do with politics and capture hypothesis in regulation, with the result being that this battle may never end until the structure of the financial services industry changes (and that may not happen in my lifetime).

So what is the take-away? It’s actually quite simple: A consumer must continually ask a financial services provider (broker, financial consultant, etc) if they are providing advice and service as a fiduciary.

In our industry, a fiduciary must advise and act in a client’s best interest, while a non-fiduciary must advise and act in a manner deemed suitable. Obviously, from a client perspective, suitability is a lower standard.

Now the problem is that some folks out there state that they sometimes provide services and advice according to the suitability standard, and sometimes according to the fiduciary standard. And if you follow the rule above, it makes for difficult conversation if every other question you ask is “are you acting as a fiduciary right now?”.

Let me be the first to propose an easy solution to all these lawsuits and convoluted regulations: When services and advice are given under the fiduciary standard, the person has to wear a bright green button on their collar; when given under the suitability standard, the person has to wear a red button on their collar.

And on the phone, two different tones can be added to the line in a similar fashion to the familiar “beep” you hear when somebody calls you on a recorded line. A website could have a small green or red flashing image in the top right corner of the web page.

So if you’re working with a guy that is constantly switching buttons, or you hear a melody of tones on the phone line — you’ll surely know you’ve got a flip-flopper on your hands.

That’s it, problem solved!

What happens to my account when the broker goes bankrupt?

For those that have brokerage accounts with Bear Sterns, they may be wondering if they will get all their money back due to the near bankruptcy and recent buyout proceedings. Luckily, there are insurance and regulations set up to protect individual investors in many, but not all situations.

Bear is supposed to keep individual account holdings separate from their operating holdings, but if you lose funds due to negligence or misappropriation of funds you will likely be covered by $500,000 of SIPC insurance. This insurance does not protect investors from fraud or market related investment losses. Also, certain “exotic” investments like futures contracts and other derivatives may not be covered.

It’s important to note that FDIC insurance is completely separate and operates in a slightly different way. To find out more on SIPC check with your custodian and research the details here. Custodians/Brokers often carry additional insurance to cover accounts beyond the SIPC limits – yet another issue that should be checked on.

Hello world!

I often have many personal thoughts on financial planning issues and would like to share them — so I’ve created this blog as a means to record these little “nuggets” of information. My posts may eventually interest a variety of people and although I may mention issues relating to money and finance, I have no intention of ever including investment advice on this blog.

Cheers!