People ask me all the time: “Can you recommend a financial advisor?” I have a couple of names that I’ll share, but I feel like I should be able to provide a wider range of experiences and specialties. Well, now I can and it’s super easy. Those few advisors that I typically share, plus a handful more, have joined together to form the Military Financial Advisors Association. I think it is very important that military folks use financial advisors that understand the unique benefits and challenges of military life.
I interviewed Adrienne Ross, CFP®, ChFC®, of Clear Insight Financial Planning, and Andrea Clark, CFP®, AFC®, of The Table Financial Planning, to ask about this new group and what it offers to military and veteran families.
What Is The Military Financial Advisors Association?
Andrea provides a great introduction: ”
MFAA is a group of certified, fee-only financial planners who have lived the military lifestyle. We speak the military language of acronyms. We understand the unique pays and benefits that you can and should exploit as part of your long term financial plan.”
Adrienne shared that all the members of the MFAA are also members of the XY Planning Network (XYPN). XYPN members are required to adhere to a fiduciary oath that they will always act in their client’s best interest. They must be fee only, so no commissions to confuse things. They must also have a planning focus, not an investment management focus.
Adrienne also told me that one of the XYPN’s underlying ideas is, “Thinking differently about how you are billing and charging to reach customers who may not be served by larger firms.” The old school way of paying for financial advice was that you had to have a certain level of investable assets. The newer model reaches out to everyone.
I love that.
Why Is There A Need For An Association?
We all know that military life is, well, special. We have unique financial challenges, but also unique benefits.
Having an association will make it easier for military families to find an advisor that understands these challenges and benefits. Plus, each member of the association brings their own experiences and information to the group.
Adrienne explains, “The planning issues for military families and retirees are complicated and require specialized knowledge. Having a group of people all focused on that same area lets them develop more detailed and deeper knowledge.”
Andrea shared a very similar sentiment, saying, “Aside from investment and insurance products, a good financial planner will understand the ins and outs of military tax advantages and use those consistently to help grow the assets of a military household. The advisors in the MFAA will also have a broad knowledge of all the benefits due to veterans and their families and how to incorporate them into a good comprehensive financial plan.”
For example, knowing how TSP works means that an advisor can help you make the right decision about other retirement assets. Or if you’re a reservist, understanding how Tricare Reserve Select works means an advisor can help you figure out the right benefit package for your civilian job.
Do You Need A Financial Advisor?
Tricky question! Military families should always start with the free resources available, whether that’s virtual counseling through Military OneSource or their installation’s personal financial manager/counselor/specialist (the name varies by branch and even location.)
Andrea told me that, “Most people seek the service of a financial advisor when the complexities of their financial situation start to outstrip their capacity to “know all the things”. There is a dizzying array of financial services and products and information out there. Your relative might know a great advisor and want to refer you, but even a financial advisor can’t know ALL the things. That is why having an advisor who specializes in your military financial life makes a lot of sense.”
How Do You Pick The Right Advisor For You?
The first thing you need to do is identify your needs. For example, I need a second set of brains to look at my current set up, and I need accountability to make the changes that I know that I need to change. You may need ideas for solving a particular problem or decision, or reassurance that your DIY plans are good.
Once you’ve identified your needs, pick three or four advisors and get in touch. Ask them questions, lots of questions. Ask about their compensation model and what you’ll get for that compensation. Do their services match your needs, and does the price seem appropriate? Do a little research into their background. Most importantly, ask about their experience with military families. (Side note: I love this podcast on how to choose a financial advisor.)
Andrea suggested this list of questions to consider:
Do you have any personal military background?
How long have you worked with military families?
How do you communicate with clients and how often?
How will we work together when I PCS again?
How are you paid for your work? (fee-only, commissions, etc)
Do you sell any products?
What is your investment management philosophy? (hint: you want investments to serve a comprehensive plan)
How will our plan change as we approach retirement?
Do you advise on social security claiming strategies?
Do you look at my taxes?
There are clear benefits to using a fee-only, independent advisor. I personally think fee-only advisors are the way to go, because you don’t want even the slightest hint that someone’s advice is based on the way they’ll be compensated. And Adrienne makes a compelling case for independent advisors, pointing out that, “Independent advisors have an edge because they are not stuck only picking from the basket of options their firm offers.”
Andrea further broke out one of the biggest challenges facing military families who are looking for financial advice: “The military community is a favored target for exploiting fears about securing the financial future of their families. Life insurance products are sold as a solution for nearly every financial situation. The military pension system and the TSP are amazing retirement solutions that sometimes get a bad rap from the financial services industry simply because they have no equivalent product to sell.” Sadly, Andrea’s absolutely right – there are many companies that want to get their hands on military families because they have steady income and they’re great clients, but these companies are not always looking out for the absolute best interest of their clients.
I am so glad to have a place where I can say, “This is where you should look for a financial advisor to help your military family build their financial plans.” I feel confident in the integrity and experience of the members of this group. Definitely check them out!
You can find Adrienne Ross, CFP®, ChFC®, at Clear Insight Financial Planning.
You can find Andrea Clark, CFP®, AFC®, at The Table Financial Planning.
You can find all the MFAA members at the Military Financial Advisors Association.