Financial planner recommendation wanted

[satpak77]

Can anyone point me towards a person or company that "specializes" (or at least fully understands) the financial planning and investment needs of pilots, corporate/airline?

I did a search on the web and really couldnt find any

thanks

 

[AcroChik]

One Place To Look

http://www.cfainstitute.org

While most of these folks specialize in the analysis of public company stock for large financial institutions (financial analysts), people with the CFA designation are expert in things like portfolio analysis, investment planning, etc., I have no doubt that you will find someone with the specific skills you're seeking through this source.

An entire segment of the profession is dedicated to Private Wealth Management.

Here's a tip: the majority of financial planners will sell you financial products (investments) for a commission. There is an inherent conflict of interest in this, given the normal human temptation to sell you things that will pay them the highest rates or return. Thus, I would look for a "fee for service" advisor who charges either an hourly or flat rate to ensure you get objective advice specifically suited to your situation.

I, myself, studied for and earned the CFA Level 1 designation, academically the hardest thing I've ever done ~ by far. People who have completed all three levels to earn the Chartered Financial Analyst diploma have a highly refined set of skills in investment selection, portfolio planning and financial statement analysis. There is a strict ethical guidline people holding the Charter are obliged to follow in practicing the trade. Don't be shy about asking about it.

If you have any specific questions about the CFA program, the qualifications, etc, please feel free to PM me.

 

[shamrock]

Here's a tip: the majority of financial planners will sell you financial products (investments) for a commission. There is an inherent conflict of interest in this, given the normal human temptation to sell you things that will pay them the highest rates or return. Thus, I would look for a "fee for service" advisor who charges either an hourly or flat rate to ensure you get objective advice specifically suited to your situation.

Great advice! My parent's have a commision-based Financial Advisor that I can't stand who has them in some investments that do far more for his wallet then my parents'. I'm trying my hardest to get them out, without much success.

Fee Based is definitely the way to go.


Just out of curiosity, how would financial advice for a pilot differ from any job? I would think that good advice is good advice no matter what your occupation. I can see using a Tax Consultant/Accountant that is familiar with Aviation careers, but to me it doesn't seem that financial planning for a pilot would be all that different than for anyone else. Unless of course you're trying to hide assets from 3 ex-wives.

 

[AcroChik]

How Would Financial Advice Differ

Investment strategies are highly dependent on the person doing the investing, their age, their current obligations, risk tolerance, and where they are in the "arc" of their earning career.

Here are some examples:

A retired couple with children grown and out of the home would be concerned with preserving capital and maximizing income rather than riskier investments focused on high rates of capital growth.

I'm 24. At my age, with modest income (CFI), but with the majority of my earnings "arc" ahead of me, I am concerned with building capital for the long term, as opposed to investments that produce an income stream (dividends and interest), that I would live off of.

A pilot at a major, with some seniority and a significant income, would likely have a mortgage, children in school, and other obligations. This would dictate a particular strategy as well.

Each of these scenarios indicates, to me, a different tolerance for risk (all investment strategies entail risk), different amounts of cash available for investment, and thus a different portfolio of investments to serve both immediate and future needs.

Geography can enter into an investment strategy, as cost of living varies significantly from place to place.

As we all know, pilots' income can vary significantly over time, both increasing and decreasing. Getting stapled to the bottom of a list can seriously impact lifstyle and investment "posture."

A financial advisor who does not take all of these and other factors (for instance, current debts and the interest rates being paid), into account when assisting a client is, at least, derilict in their duty and is probably more a salesman than a professional investment counselor.

Because of the uncertainty in our profession, the state of the industry, I'm very glad to see this topic come up for discussion. It's really now, at least for me, a matter of being able to afford to fly rather than buying a Porsche from the massive infusion of cash pouring in from warming an FO seat at a major.

Hey, got an extra Ramen for me?

 

[semperfido]

Can anyone point me towards a person or company that "specializes" (or at least fully understands) the financial planning and investment needs of pilots, corporate/airline?

I did a search on the web and really couldnt find any

thanks

fidelity, merril lynch, A.G. Edwards etc all have people that can help you with questions and strategies.

 

[shamrock]

Investment strategies are highly dependent on the person doing the investing, their age, their current obligations, risk tolerance, and where they are in the "arc" of their earning career.

Thanks AcroChik. Good info.

Full disclosure: I do all my own financial planning/investing and, based on past experience, don't have much love for the Financial Advisor profession in general.

My only point was that there doesn't seem to be any "aviation specific" requirements for good financial advice. Your above quote is true for anyone planning for their future, regardless of their occupation. A good financial advisor should take all the factors you mention (current/future income, debt load, family situation, etc.) into account when advising a client.

To me, overlooking a place such as (example) Fidelity in search of "Aviation-specific" advice is not necessary because good advice will still be good advice as long as it is tailored to the specific client's situation.

I agree that this is a good topic for the board. Understanding your finances will allow you to form an educated opinion and take an active roll in your planning should you feel the need to seek the help of an Advisor.

You can do it yourself though! (Sorry, my bias is showing again.)

 

[AcroChik]

You're Quite Right, You Can "Do It Yourself"

However, investment is about numbers. The various scenarios I described above can be expressed as mathematical formulae that assist in the optimization of strategies responsive to individual needs. Making use of such tools helps build investment portfolios responsive to current needs and long- and short-term planning.

Degrees of risk tolerance can be quantified, and various investment vehicles then filtered for such traits. A stock I might choose to purchase because of its volitility and volume metrics might be precisely the one you should avoid based upon your own situation.

Gut level investing isn't investing (I'm not saying you do this), it's gambling, and the house has the odds in its favor. Every dollar someone loses goes somewhere..., to the person on the right side of the trade. As the saying goes: the financial markets are a parimutual system for redistributing capital to its rightful owner..., usually the person with better information.

Emotion is an important factor here. We are all quite emotional about our money. It's the source of both pleasure and pain. It affects our relationships, our love life. It's almost impossible to think of our hard earned pile as, simply, inventory. One reason to consult a financial advisor is to get the pragmatic, unemotional viewpoint of someone who deals with such questions every day.

It's also important, I think, to clearly identify the role of a securities broker. A broker is a salesman. Having studied for and passed the NASD Series 7 and 63 exams, a broker is trained to sell investments and then execute trades. A broker is not trained as a financial advisor. I am not demeaning brokers. I know good, honest hardworking brokers who care a lot about their clients' wellbeing. But, their role is limited, not only by training but also by SEC regulation.

Shops like Fidelity, Goldman, Advest, Edwards, etc, are reputable firms with justly deserved reputations. A reality of the securities business is, however, that the regulatory structure it operates under is so arcane and complex that even the most dilligent and honest of them occassionally is in violation of something (it's a lot like the FARS).

I'm not suggesting that people ignore these and other fine companies. What I'm suggesting is that one make use of a skill set that, possibly, you've overlooked or perhaps weren't aware of in making investment plans.

A Chartered Financial Analyst is not a Financial Planner in the sense you are thinking of. The training is more along the lines of Financial Engineering. A CFA does not sell products. A CFA sells knowledge. The majority of CFAs work for investment banks doing what is known as fundamental analysis of publically traded securities, whether they be fixed income, stocks, CMOs, options, etc. One branch of the work is involved in Private Wealth Management. It's a highly mathematical discipline, and has sometimes been called "financial forensics," when referring to the analysis of SEC filings made by a company. This is a skill set unknown to a traditional Financial Planner.

The skills I have aquired in earning the CFA Level 1 (equivalent of a PPL in this field except that it took a year and 500 hours of study), has enabled me to perform rational analyses on individual stock trades at a level I would never be able to accomplish without the knowledge. Have I benefited from this? Yes.

Could anyone benefit from talking to a Chartered Financial Analyst about their investment strategy? In my opinion, yes. Thus, I suggest taking a look at this section of the web site: http://www.cfainstitute.org/investors/

No matter what, I hope everyone makes money. Of course, that's impossible, because for someone to make a dollar it has to come from someone else. ;~)

 

[satpak77]

I suppose the underlying theme to my question is there are MANY "niche planners" who target rich doctors, old folks, etc, specialize in these categories.

Pilots, with travel, per diem, etc etc, have a "non-standard" job and I just don't find many planners catering to pilots out there

 

[AvIndSales]

Financial Planner Recommendation

Hi. Since you are not able to post names on this message board, PM me for an awesome recommendation for a planner who specializes in aviation.

 

[AcroChik]

Well...

How serious could an inquiry be if it didn't include looking at a web site, sorting through some information, making a few investigatory phone calls and then interviewing a few likely candidates? After all, we're looking for someone to help us with something important. It's not as easy as hiring a pilot.

As mentioned in the first reply, no doubt you'll find people with the specific skills and checkable references to fit your specific situation.

Many lines of work have income streams similar to pilots, with per-diems, etc. We're not reinventing the wheel here.

Both the investment optimization and tax limitation questions have straightforward answers that do not require magical thinking. Rational planning and sound professional advice will pretty much do the trick.

 

[FurloughedAgain]

Milo Zonka, an FIT School of Aeronautics graduate and president of the alumni association is an AG Edwards financial planner. He does work for quite a few airline and general aviation pilots.

If you want his contact information, drop me a PM.