Not all financial planning is created equal. In fact, this concept is why PAX Financial Group was created in the first place.
In 2007, three Texas advisors were tired of the traditional “Wall Street” environment, which favored big business and high net worth individuals over everyone else. There were sales quotas, conflicts of interest and layers of hidden fees, which makes it difficult for the average person to get a fair shake.
Tired of the pressure and ethical dilemmas in front of them, these advisors – the three founders of PAX Financial Group – decided to do something different. One of these advisors was me.
I was not raised in a wealthy family. I didn’t even know what a financial advisor was when I was younger. But what I did know well was the struggles that many people have with creating a secure future. And I knew financial stress.
Instead of helping the rich get richer, the other founders and I decided to try to educate the average person about what financial planning was – and what it wasn’t – and what they needed to know to help ensure they were getting good financial advice. So we left our Fortune 100 employer to form PAX Financial Group.
And now, here’s another chance. I wanted to share with you some questions we get from regular, everyday people who become our clients. These questions are some that you might have. Because instead of the behemoths of Wall Street, PAX Financial Group is focused on helping you. And your kids. And even your grandkids one day. We’re Certified Financial Planners (CFPs) who are proud to be able to communicate complex financial concepts in plain language.
Here’s how a typical conversation with a potential client may go:
What does it take to become a financial advisor?
That’s actually a more difficult question to answer than it seems. There are a lot of people who call themselves a financial advisor, but they shouldn’t. For example, a person whose primary role is to sell financial products for a commission is called a registered representative, not a financial advisor. They often work with a broker dealer who provides resources to support their business. Those same registered representatives can be financial advisors if they pass either a Series 65 or 66 exam. Then, they will be subject to the financial advice laws from either their state or the Securities Exchange Commission (SEC).
Ok, I think I get it. So when someone passes that 65 or 66 exam, they become a fiduciary?
That is actually a hot topic in our industry. They could be a fiduciary, but they may not be. A fiduciary is someone who provides advice that is in the clients’ best interest. In other words, a financial advisor must strive to provide advice free of conflicts in order to produce the best option available to his or her clients. If conflicts exist, a financial advisor is required to disclose all conflicts to each client.
Are you a fiduciary?
Yes. We act in the best interest of our clients.
How do you get paid?
When we thought about building an advice company, we thought of what could happen: When a potential client initially sits down with a financial advisor, they naturally think, “What’s his angle? What’s he trying to sell?” When this happens, people have a hard time listening to the advice. So, we decided to have all advisors on salary at PAX Financial Group so there isn’t a concern about conflicted agendas. Then, hopefully, the clients can relax, listen and make the financial adjustments needed based on wise council.
That’s cool. I’ve never heard of that before. So how do clients pay for a financial advisor’s services? Is it by check, credit card, bitcoin?
Ha! That’s a hard no for bitcoin. We are huge fans of Dave Ramsey so we keep our billing simple. Clients pay us for two things: Advice and to manage money. We charge a reasonable percentage to give advice and manage our clients’ money. Our fee schedule is disclosed upfront.
I remember you telling me that you guys are huge Dave Ramsey fans. What does that really mean?
In 2005, Dave set up something called the ELP program for investment people he recommended to the community. We were a part of that group. It has evolved to the SmartVestor program, and I’m on board that system as well. Finally, I’m a part of his Investment Council. That is a select group of financial advisors across the country that provides Dave boots-on-the-ground advice. I’m honored to be a part of that group.
Why did you decide to become a financial advisor?
I love what I do. Money is more than cash and currency. It plays a role in dreams and failures. It’s a part of your story growing up and it’s a part of mine. It will be a part of my children’s story and the next generation’s. I want to do my best to help make people happy and comfortable. That’s what I’m called to do.
Clients have a lot of questions. And they should. Financial planning is a confusing industry yet a very important step in a successful future. Don’t take these hard decisions and questions on your own. Doing it yourself may sound like it could save you money, but the truth is, while that might be the case for some people, in most cases, DIY approaches to financial planning result in costly mistakes. And that’s simply because most people aren’t financial planning experts. They’re not updated on all the latest tax and estate laws. They don’t watch the market and know what it is that they’re watching. And most people aren’t wired to make decisions without emotion. Especially when it comes to their finances. The market can be scary, and people are wired to react. Emotional reactions can be expensive.
It’s also important to understand that hiring a financial advisor does not mean that you lose control and don’t know what’s going on with your investments. PAX Financial Group stays in constant contact with our clients and reviews portfolios on a regular basis. We check in with clients to make sure their life goals are still the same, their lifestyle hasn’t changed and the decisions they may have made are still appropriate and attainable.
If you’re looking for a fiduciary financial advisor to work with, contact us to see if we’re a good fit.
This material is provided by PAX Financial Group, LLC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information herein has been derived from sources believed to be accurate. Please note: Investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.