This month, I celebrated my one-year anniversary at Redwood Wealth Management. To give you some background, my career originally started out in retail marketing. Although I enjoyed many aspects of my previous profession, I wanted a change and embarked on a new career path as Redwood’s Operations Specialist.
It’s challenging work, a fascinating field and I’ve learned a great deal within a short time. Here are my biggest takeaways (so far):
1. Redwood is different from other firms: I think this is the most important thing I’ve learned since taking on this role. Coming into the financial planning industry, I didn’t realize many of the differences between financial firms. Redwood Wealth Management is an independent Registered Investment Advisor that is purely fee only – an approach to financial planning that most firms don’t offer.
2. Having a “fee only” investment advisor is important: In layman’s terms, “fee only” means no one makes a commission for selling products. Redwood advisors are unbiased in that they aren’t incentivized to sell specific mutual funds, insurance, annuities or other financial vehicles. In fact, Redwood doesn’t sell products at all – a differentiator that is part of Redwood’s fiduciary duty.
3. Having a fiduciary matters too: To qualify as a Registered Investment Advisor, an investment advisory firm must have a fiduciary duty to its clients. In other words, Redwood must act in the best interest of the client. I was surprised to learn that this standard is only required for certain types of financial firms; the rest are held only to a “suitability” standard, meaning the advice must be suitable, but it does not have to be best for you.
4. Intelligent, disciplined investment management is essential, but so are many other aspects of financial planning: Advisors review client’s investment accounts, but also financial goals, estate plan, insurance, education plan and tax plan. It was eye opening to see the importance of having this bigger picture. Yes, Redwood wants you to diversify your investments and be at an appropriate risk level; however, you also should look at your assets collectively (instead of just one or two accounts) and protect them. Estate planning and insurance planning are critical components and the tax consulting and education planning are invaluable.
5. Redwood offers tax planning which is different from tax preparation: – Most people only think about taxes when they’re filing their tax return or during an election year. However, taxes also are an important piece of financial planning. Redwood advisors think through all account openings, money movement and financial plans from a tax perspective. Our firm considers personal and business taxes throughout the year and will work with you to minimize your tax liability.
6. CPA, CFP® and CFA® designations: Redwood Wealth Management also is well-rounded in the services they provide and in their expertise. Just look at the number of degrees and certifications our team members hold. The CPA designation as most of you know stands for Certified Public Accountant. The CPA license requires 150 hours of education (either a 5 year degree or a master’s degree), 2,000 hours of experience, a 16 hour test as well as continuing education. The CFP® designation, which stands for CERTIFIED FINANCIAL PLANNER™, requires coursework, a six-hour exam and three years of direct planning experience. And to obtain a CFA® (Chartered Financial Analyst®) designation, a professional must have four years of experience and pass three six-hour tests within a three-year timeframe. Whether it’s taxes, investments, estate planning or another area of financial planning, each Redwood team member has one or more areas of expertise. This allows for more robust planning because our clients have a team collaborating on their behalf and sharing knowledge amongst one another. It’s an approach that not only helps clients, but makes Redwood a great place to work.