Is It Time To Go If Your Financial Advis...

Cryptocurrency, Bitcoin, and human financial advisors have a love-hate relationship. Many financial advisors have no clue what to tell their clients about cryptocurrency —since these advisors have built their careers in the traditional financial markets. Still, others are a part of financial advisory firms that are largely risk-averse and have been incredibly slow to provide internal guidance on cryptocurrency. And then there is of course a group of financial advisors that are convinced that Bitcoin, cryptocurrency, and the entire decentralized finance space is a fad, scam, and not worth your time or attention. There is a reason for that. Cryptocurrency investing as a whole is still in its infancy. Only thirteen percent of Americans bought or traded cryptocurrency in the past 12 months, according to a survey published by NORC, a research group at the University of Chicago. That number is compared to 24% of American’s trading stocks during that same period. 

At Guidefi, we talk to financial advisors around the country every day to see if they are a fit for the Guidefi Advisor Network. As a result, we have had numerous conversations with independent financial advisors and we have asked about their thoughts on cryptocurrency. Some chuckled at the concept of digital wealth and others have questioned if there were really Bitcoin or crypto millionaires out there. (We know that there are.) If your advisor laughs at you when you ask about cryptocurrency, it might be time to find a new financial advisor. We recommend paying close attention to how your financial advisor reacts to your cryptocurrency inquiries. Also feel free to share with them that in August 2021, JP Morgan started offering Bitcoin Funds to their high net worth clients. So what do we recommend that you do if your financial advisor is saying no to crypto? Here are four issues to consider and our thoughts on how best to move forward. 

1) Determine If Your Financial Advisor Understands the Cryptocurrency Space Try to determine if your financial advisor is proficient in cryptocurrency and decentralized finance. Consider the age of your advisor. Age is not always an indicator of cryptocurrency proficiency, but it may be an indicator of having an advisor that may only recommend comfortable, tried, and true traditional market investment strategies. Ask how long your advisor has been knowledgeable about the space, and if they are current investors. Ask for their recommendations on cryptocurrency security and custody options. Ask about the best ways to gain exposure to the industry. If your advisor is not able to answer those basic questions, they may not be knowledgeable enough to provide you with an informed viewpoint on cryptocurrency. Perhaps it is time to consider having a different financial advisor for your cryptocurrency investments. 

2) Consider How Your Financial Advisor Is Compensated. Be sure that you understand how your financial advisor is being paid for their services. If their compensation model is commission-based or a percentage of traditional assets under management, a cryptocurrency investment portfolio may not offer the same profitability margins for your advisor. As a result, there may be a stronger incentive to encourage you to stay in stock-based ETFs or mutual funds. However, there are several ways to gain exposure to cryptocurrency that involve traditional market investment products. A financial advisor that is knowledgeable about cryptocurrency should be able to share these options with you. 

3) Consider Your Advisor's Compliance Restrictions On Cryptocurrency. The regulatory environment and oversight jurisdiction for cryptocurrency is evolving constantly. Some people even say that it is still in its infancy. Because of this many financial advisors are unable to gain advisory “clearance” from their internal compliance departments or broker dealer partners to recommend cryptocurrency to their clients. This week for the first time, the industry got a view into the Security and Exchange Commission’s priorities on cryptocurrency. SEC Chair Gary Gensler shared that focusing on investor protection is his greatest priority. Chair Gensler has also made it known that the SEC is requesting an expansion of its existing authorities to regulate the space. Once the regulation priorities in the space have been more clearly defined, we believe more financial advisors will likely become comfortable recommending cryptocurrency as an asset class. 

4) Consider Enhancing Your Knowledge of the Cryptocurrency Space. An informed client is the best client for any financial advisor. Whether you are planning to use a financial advisor to help manage your cryptocurrency investments or not, consider becoming a student again and learning about the cryptocurrency space. The cryptocurrency space is rampant with scams, fraud and misinformation. So make sure you are connected to reputable sources of information. Follow Guidefi on LinkedIn to get news and commentary on cryptocurrency investing. Guidefi's wealth education services area, called Guidefi Academy, is launching its first course for retail cryptocurrency investing called Cryptocurrency 101. This video-based on-demand course is designed for busy professionals with little knowledge of blockchain or cryptocurrency. Sign up for the waiting list for the course here

Cryptocurrency investing gives you the freedom to manage your wealth on your own terms. You may decide that you need a separate financial advisor to handle your cryptocurrency investments or no crypto-focused financial advisor at all. Whether you choose to work with a financial advisor or not, Guidefi is prepared to support your cryptocurrency investing journey through access to our community, consulting services and cryptocurrency education courses. Consider signing up to join our community at to let us help you learn how to build, grow, and protect your crypto wealth.


Human Advisors Vs Robos: How Do You Choo...


Robo-Advisors are a pretty popular investment approach option these days. These advisors typically differ from brokerage to brokerage,but the idea is that a complex computer algorithm can manage your investment portfolio better than a human Financial Advisor. Companies like Betterment, Personal Capital, Ellevest all have great Robo-advisor options. In addition, these companies offer customer support for questions about the site or the service. 


What's Great About Robo-Advisors (Pros)


1) Cost: (sort of): Most people believe that Robo-Advisors are always cheaper than human Financial Advisors but that is not always true. This is because there are different types of human Financial Advisors: Fee Only, Hourly, Fee Based. The difference lies in how these advisors get paid. Fee Only Advisors set their own flat fee prices, and Hourly Advisors  are paid hourly. Fee Only Advisors also typically charge at least 1% of the total value of your portfolio.  Robo Advisors can charge as little as .25% of assets under management all the way up to 2%+ of AUM --so you really need to read the fine print when you are comparing advisors. Fee Based advisors earn commissions on the investment projects they recommend. 


2) Lower Minimum Amounts- Depending on the Robo-Advisors you choose, these advisors can have a lower bar to get started. Personal Capital has a minimum investing amount of $50,000 and other advisors like Personal Capital or Ellevest allow you to get started investing with only $1000 to $5000. As a point of comparison, some human advisors (mostly private wealth managers) require at least $500K of investable assets, but others (like many of the advisors in the Guidefi Advisor Network) can help you start investing with as little as $1000. 


3)  Simplicity: Most Robo Advisors pride themselves on ease of use. Many have cool simple apps and interfaces that put you in the investment driver seat.


What's Not So Great About Robo-Advisors (Cons)


1) Money is personal and Robo-Advisors Are Not: Robo Advisors are not customized to your individual needs and they are not designed to be. Robo Advisors assume a base of knowledge and aren't available to talk you off the ledge after a significant market downturn. They can't help you adjust to personal life changes that impact your finances and they don't allow you to see your whole financial picture. Taxes, estate planning are typically left out of view when dealing with a Robo-Advisors.  


2) No Face to Face Meetings: If you are the type to "Set It And Forget It" then a Robo Advisor approach might work best for you. But if you would like to sit down and meet in person or virtually with your Financial Advisor and have a relationship with that person, a human advisor is likely a better option for you.


3) Robo-Advisors can be limiting: Robo-Advisors are limited by asset class.  Sophisticated and newbie investors may want a broader investment portfolio with a wider range of asset types than a typical Robo-Advisor offers. Of course whether you are an expert or a new investor you may be limited to the Robo-Advisors online community or glossary for additional information about an investment choice. 


The Final Analysis

No matter which approach you opt for, selecting a Robo-Advisor versus a human Advisor is a personal choice. When you are making the decision, please be sure to consider  the level of investment guidance you need to suit your individual style, personal goals, and your level of baseline knowledge. If you are looking for a great culturally competent advisor of color be sure to sign up to be matched on our site. 

How Can You Tell If Your Financial Profe...

Financial Professionals are not all created equal—so it is important to understand the financial advice industry’s most common credentialing standards. The Guidefi Advisor Network is made of vetted credentialed financial professionals which includes financial planners, financial counselors and financial coaches. Several of the financial professionals within the Guidefi Advisor Network have the Certified Financial Planner (CFP) designation, one of the most rigorous credentials for the financial planning profession. Our financial coaches and counselors have the AFC, Accredited Financial Counselor or FFC, Financial Fitness Coach certification, which are the gold standards for financial coaching and counseling. The AFC and FFC credentials are issued by the ACFPE, Association for Financial Counseling & Planning Education. We have compiled a list of the most relevant financial planning, coaching and counseling credentials below:

1.Certified Financial Planner (CFP): The issuing organization is the Certified Financial Planner Board of Standards. All CFP holders must have a Bachelor’s Degree or higher from an accredited college. In addition CFP candidates must have three years or 2,000 hours of practice in a financial planning role. The requirements of the role is that the candidate must complete the CFP Board exam. Any candidate that holds either a Certified Public Accountant (CPA), Chartered Financial Consultant (ChFC), Certified Loan Underwriter (CLU), Attorney’s License, Ph.D. in Business or Economics or DBA, may be exempted from the examination. There is a continuing education requirement of 30 hours every two years. 

2. Accredited Financial Counselor® (AFC®): The issuing organization is ACFPE, Association for Financial Counseling & Planning Education. AFC holders must have a Bachelor’s Degree or higher from an accredited college in financial planning, counseling or related field. In addition, candidates must have 1000 hours of practice in a financial counseling role and complete the ACFPE exam. 

3. Financial Fitness Coaches (FFC): The issuing organization is ACFPE, Association for Financial Counseling & Planning Education. FFC holders must complete the FFC financial coaching certification. 

4. Chartered Financial Analyst (CFA): This credential is issued by the Chartered Financial Analyst Institute, which is a global association of investment professionals. As such, most CFAs focus on investment management and opt for wealth management and some retirement planning roles. CFA candidates must be in their final year of their Bachelor’s program at minimum, and have four years of professional experience or a combination of university education and work experience that totals four years. The CFA’s education requirement is based on a 250 hours self-study program in readiness for a very difficult three-level exam, which must be passed. In addition, CFA candidates must have at least 4 years of experience in finance in a decision making role. The CFA does not have a continuing education assessment. 

5. Registered Investment Advisor (RIA): Contrary to popular belief, the Registered Investment Advisor (RIA) credential is not a professional designation but it is a very important credential for an investment firm. In order to legally operate an organization that provides investment advice, the investment organization must be registered with the Securities Exchange Commission or the financial securities board in their state of practice. Most wealth managers and investment managers are RIAs. Practice as an RIA also requires the passing of the Series 65 examination or the maintaining a Series 7 and Series 66 with a broker-dealer firm. The Series 65 is can be waived in some states if the individual holds CFA, ChFC, PFS or CFP. 

6. Chartered Financial Consultant (ChFC): The Chartered Financial Consultant designation is issued by the American College. The main prerequisites are three years of full-time experience within five years of applying for the designation. In addition ChFC candidates are required to take seven core and two elective courses, an equivalent of 27 credit units. There is also a final closed book examination, with 30 hours of Continuing Education every two years.

If you are evaluating a financial professional, it is important to ask about their credentials. Sign up for our newsletter to get more tips on choosing the right financial professional for your journey to build wealth

8 Reasons To Hire A Financial Profession...

Many Americans have no issues seeking professional help for their health. The idea of going to a medical specialist for specific health concerns seems very commonplace. Yet when it comes to their finances--many people try to go it alone and they choose not to seek help. This is where Guidefi comes in. We make it easy for you to find the financial help or guidance you need. Through the Guidefi Advisor Network, we can connect you with a culturally competent financial professional with the expertise to address your specific financial needs. At Guidefi, we connect our users with two types of financial professionals: Financial Advisors and Financial Coaches. Financial Advisors provide financial planning and investment management services, while Financial Coaches provide financial coaching and counseling services. 


The services of a financial professional can be extremely flexible, they can help you survive a financial crisis or simply plan for your financial future. We have compiled a list of 8 life situations where the expert guidance from a financial advisor or financial coach would be useful. 

1. STUDENT DEBT: If you have excessive levels of student debt ($10,000+), a financial professional can help you develop a budget to free up income to help pay down your debt. This professional can also help you restructure the debt to pay your balances off faster. Guidefi can help you find the right financial professional to help you manage your student debt. 

2. ENTREPRENEUR: If you are an entrepreneur (or small business owner), your personal and professional taxes may be more complicated than usual. Do you know that there are financial professionals that specialize in supporting entrepreneurs? Guidefi can help you find a financial professional to examine your current and future small business cash flows to ensure it is adequate for your personal retirement planning and other financial goals. 

3. NEW FAMILY: If you just started or are about to start a family, a financial professional can help you determine how to manage your newly expanded household with the additional expenses of childbirth, and college planning.  

4. RECENT DIVORCE OR JOB SEPARATION: If you recently got divorced from your spouse or separated from your job, a financial professional can help you scenario plan and figure out the best way to move forward financially.

5. UPCOMING RETIREMENT: If you are 5 -10 years away from retirement or are already retired, a financial professional can help you determine if you have the funds available to live comfortably for the next 10 -20 years. . .

6. FEEL OVERWHELMED BY YOUR FINANCES: If you feel overwhelmed by your financial situation, a financial professional can help. They can help you identify your financial goals and the priorities and actions needed to get there.  

7. FINANCES ARE OK, BUT...YOU WANT TO BE SURE: If your finances seem are ok, but you just want to know if you are missing anything –like tax breaks, or financial leaks in your budget, a financial professional can help. 

8. WANT TO LEARN MORE ABOUT YOUR FINANCES: If you recognize that you want to learn how to manage your finances, but you need a guide, a financial professional would be helpful for you.

There is always a good reason to look for good financial advice. Whether you need to confirm your current financial plan or change directions, the right financial professional can help you get on or stay on the right financial path. If you want to find the right financial professional for you —Guidefi can help. Sign up to use our free advisor match tool and get started on your journey to build wealth.