National Association of Personal Financial Advisors
| Formation | 1983 |
|---|---|
| Type | Financial planning, trade organization |
| Location | |
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Official language
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English |
| Website | napfa |
National Association of Personal Financial Advisors (NAPFA) is an American financial planning trade organization created in 1983 to expand the use of fee-only financial advisors by individual consumers. NAPFA established the first set of professional standards for fee-only financial advisors and has updated them to reflect changes in industry practices. Due to these standards, NAPFA members retain a reputation for excellence and integrity in a profession that has suffered numerous scandals in the last several years.
According to its website, NAPFA's core values are as follows: competency, comprehensive financial planning, objective fee-only compensation, a client-centered fiduciary relationship, and complete disclosure of fees.
NAPFA members are distinguished from other financial professionals in several ways.
The combination of strict fee-only rules and a peer review have kept NAPFA's membership small compared to other professional financial planning organizations. As of September 1, 2010, NAPFA had approximately 2,400 members.
NAPFA's Board members, staff, and individual members are regularly quoted in leading consumer finance publications. They are valued for providing objective advice that is not affected by sales recommendations (because they are not compensated for sales recommendations).
NAPFA defines a "fee-only" financial advisor as one who is compensated solely by the client, with neither the advisor nor any related party receiving compensation that is contingent on the purchase or sale of a financial product. This definition is in direct contrast to most advisors, who earn commissions, discounts, and other incentives when their clients purchase financial products. Also, unlike other financial planners, NAPFA members are required to clearly disclose the fee in advance.
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