What's on your mind?
Frequently Asked Questions
At Bright Wealth Management, LLC our goal is to provide comprehensive financial planning and investment management solutions. Below are some frequently asked questions that are answered for your benefit. Please feel free to contact us today if you have additional questions or would like to speak to us.
A: Fiduciary means to hold a confidence or trust. A financial services industry professional who has a fiduciary responsibility to his or her clients must put a client’s needs and interests ahead of his or her own. Financial Advisors have a fiduciary responsibility to their clients. While stockbrokers and insurance agents are regulated and licensed, they do not have a fiduciary responsibility to their clients. The recommendations they make must only meet the “suitability standard.” In other words, the risk level of the product must be suitable for the client based on income, assets, risk tolerance or another standard that is specified in the prospectus. Advisors with a fiduciary responsibility are less likely to push products that earn them a quick buck.
A: Financial planning covers all aspects of a person’s financial well-being. This includes savings, investments, retirement and college savings plans, insurance coverage, and estate planning. Retirement planning covers only investments made for retirement.
A: A financial advisor will be able to connect all of the financial dots in order to provide you with an overall plan to meet your financial goals. He or she should have training and experience in all kinds of financial products and financial aspects of your life – equities, bonds, insurance, taxes, and estate planning – in order to make the right recommendations for your personal situation. A financial advisor can also save you thousands of dollars in tax deductions and find higher-yielding investment products at little or no extra risk.
A: Choose a financial advisor who has experience dealing with clients in similar circumstances to yours. You’ll also want to make sure that the financial advisor has your best interests in mind, and that he or she isn’t selling you products that are not suited to your needs. Interview prospective financial planners and ask them about credentials, management strategies, and history of performance.
A: Asset allocation refers to the diversity of your entire savings and investment portfolio across asset classes. Stocks, bonds, cash and real estate are asset classes. Diversification refers to the types of investments held within each class. For example, both 3M and Union Pacific are high-cap equities in the Industrials sector. Because they’re in the same sector, these two stocks are likely to move up or down together. However, Tyson Foods is in the Consumer Staples sector. It is not likely to move in tandem with 3M or Union Pacific. Owning 3M and Tyson Foods provides diversification within the asset class of stocks. But that’s not enough. A portfolio that invests in multiple types of assets, not just stocks, is also important.