If you are looking for a career in the personal finance industry, achieving a financial planner education will advance your knowledge considerably. The demand for financial planners has increased, especially for those specializing in retirement. With over fifteen trillion dollars in retirement assets in the United States, an aging population, and rising concern over the future of Social Security, the public demand for financial professionals with retirement planning expertise has never been greater. A financial planner education will broaden your knowledge, teach personalized strategies and give realistic advice in order to improve the clients’ retirement experience.

A retirement plan specialist realizes that all investments that have ever existed fall into one of three broad categories: equity, debt, or hybrid (combination of equity and debt). Equity investments include real estate, stocks, commodities, and collectibles. Debt instruments include cash equivalents, bonds, fixed-rate annuities, mortgages, and bank CDs. Hybrids include balanced funds, asset allocation funds, convertibles, and equity-indexed annuities. Derivatives such as options and swaps can be a hybrid, equity, or debt instrument, depending on how they are structured. Alternative assets fall into one of these three categories, depending on their structure.

Every legitimate investment has positive and negative features that you will learn about in your financial planner education. For example, bank CDs are FDIC insured and provide a guaranteed rate of return. The biggest negatives of CDs are that they are fully taxable; moreover, after-tax, after-inflation returns are poor. Another example is futures contracts, where the investor is betting (or hedging) that one or more commodities are going to increase or decrease in value during the term of the contract. The upside potential is great, but so is the downside risk, given that the investor could lose all of their capital.

When designing a portfolio for a client, an advisor must consider five things about an asset. These five aspects become very important to a retirement plan specialist when mapping out investments for his or her client’s portfolio. First is its historical return, second is its risk level, third is its portfolio fit (diversification traits), fourth is its liquidity, and fifth is taxation. It is doubtful a client will want an asset with a poor track record.

Adding certain risky assets to a portfolio can actually reduce overall risk, as it returns randomly or negatively correlated to other portfolio assets. However, the client may have difficulty appreciating how something risky actually reduces risk. There is also the reality that during market meltdowns, a very high percentage of random and negative correlated assets can drop in value at the same time (e.g., commodities and stocks during 2008).

A high level of marketability may also be important, either due to investor or advisor psychology or the fear that losses may not be limited during an extended downturn. Marketability has to do with the ease of which something can be bought and sold-is there a ready market for this asset if I want to quickly add or reduce my position? Investments such as most stocks, bonds, and commodities are highly marketable. A financial planner education will put you on the right track to becoming a retirement plan specialist.

Cory Bowman is Director of Ops at the Institute of Business Finance. IBF has helped thousands of members of the financial services industry attain designations. For more information about financial planner education, retirement plan specialist visit http://www.icfs.com

Cory Bowman is Director of Ops at the Institute of Business Finance. IBF has helped thousands of members of the financial services industry attain designations. For more information about financial planner education, retirement plan specialist visit http://www.icfs.com

Author Bio: Cory Bowman is Director of Ops at the Institute of Business Finance. IBF has helped thousands of members of the financial services industry attain designations. For more information about financial planner education, retirement plan specialist visit http://www.icfs.com

Category: Education
Keywords: financial planner education, retirement plan specialist

If you are looking for a career in the personal finance industry, achieving a financial planner education will advance your knowledge considerably. The demand for financial planners has increased, especially for those specializing in retirement. With over fifteen trillion dollars in retirement assets in the United States, an aging population, and rising concern over the future of Social Security, the public demand for financial professionals with retirement planning expertise has never been greater. A financial planner education will broaden your knowledge, teach personalized strategies and give realistic advice in order to improve the clients’ retirement experience.

A retirement plan specialist realizes that all investments that have ever existed fall into one of three broad categories: equity, debt, or hybrid (combination of equity and debt). Equity investments include real estate, stocks, commodities, and collectibles. Debt instruments include cash equivalents, bonds, fixed-rate annuities, mortgages, and bank CDs. Hybrids include balanced funds, asset allocation funds, convertibles, and equity-indexed annuities. Derivatives such as options and swaps can be a hybrid, equity, or debt instrument, depending on how they are structured. Alternative assets fall into one of these three categories, depending on their structure.

Every legitimate investment has positive and negative features that you will learn about in your financial planner education. For example, bank CDs are FDIC insured and provide a guaranteed rate of return. The biggest negatives of CDs are that they are fully taxable; moreover, after-tax, after-inflation returns are poor. Another example is futures contracts, where the investor is betting (or hedging) that one or more commodities are going to increase or decrease in value during the term of the contract. The upside potential is great, but so is the downside risk, given that the investor could lose all of their capital.

When designing a portfolio for a client, an advisor must consider five things about an asset. These five aspects become very important to a retirement plan specialist when mapping out investments for his or her client’s portfolio. First is its historical return, second is its risk level, third is its portfolio fit (diversification traits), fourth is its liquidity, and fifth is taxation. It is doubtful a client will want an asset with a poor track record.

Adding certain risky assets to a portfolio can actually reduce overall risk, as it returns randomly or negatively correlated to other portfolio assets. However, the client may have difficulty appreciating how something risky actually reduces risk. There is also the reality that during market meltdowns, a very high percentage of random and negative correlated assets can drop in value at the same time (e.g., commodities and stocks during 2008).

A high level of marketability may also be important, either due to investor or advisor psychology or the fear that losses may not be limited during an extended downturn. Marketability has to do with the ease of which something can be bought and sold-is there a ready market for this asset if I want to quickly add or reduce my position? Investments such as most stocks, bonds, and commodities are highly marketable. A financial planner education will put you on the right track to becoming a retirement plan specialist.

Cory Bowman is Director of Ops at the Institute of Business Finance. IBF has helped thousands of members of the financial services industry attain designations. For more information about financial planner education, retirement plan specialist visit http://www.icfs.com

Cory Bowman is Director of Ops at the Institute of Business Finance. IBF has helped thousands of members of the financial services industry attain designations. For more information about financial planner education, retirement plan specialist visit http://www.icfs.com

Author Bio: Cory Bowman is Director of Ops at the Institute of Business Finance. IBF has helped thousands of members of the financial services industry attain designations. For more information about financial planner education, retirement plan specialist visit http://www.icfs.com

Category: Education
Keywords: financial planner education, retirement plan specialist