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The way you manage your finances can have significant effects—positive or negative—on your future and the future of your loved ones, so it’s essential to get the best advice and guidance possible. That’s why many people decide to hire a financial planner instead of just going with the flow and trying to manage their own money, assets, and investments. 

Unfortunately, not all financial planners are cut from the same cloth, and some can offer better guidance than others. In the text below, we will touch on several key topics, including What does Certified Financial Planners (CFPs) actually do? What does a “Monte Carlo Analysis” include? Is there more you should know about financial planning?

Additionally, we will give you valuable insight into what we do at Alpha Wealth Funds and what sets us apart from our competitors as a stand-out partner that will help you manage your finances. Let’s get started.

What Is a Monte Carlo Analysis? 

A Monte Carlo analysis is a modeling technique that contains multiple variables. It can be thought of as a complex illustration of multiple “what if” scenarios. Some of the best Monte Carlo multivariate models are used to evaluate different stock market investments. In most cases, researchers use them to forecast investment outcomes so they can better manage the risk associated with them. 

Typically, the Monte Carlo model allows researchers from all kinds of industries to run trials to define all the potential outcomes of a particular event or decision. When used in the financial world, Monte Carlo analyses are usually connected to some kind of investment. That’s because, when combined, all of those separate trials create a risk assessment or probability distribution for a given investment or event. 

When investors use the Monte Carlo method for their analysis, the results are compared to different levels of risk tolerance so that stakeholders can make an informed decision about whether they want to proceed with an investment.

What Do CFPs Do? 

Certified Financial Planners (CFPs) are formally recognized as an expert in the areas of taxes, insurance, financial planning, estate planning, and retirement. It’s owned and awarded by the Certified Financial Planner Board of Standards and is given to people who are able to successfully complete the CFP’s initial exams and then continue to complete annual education programs that allow them to sustain their certification and refine their skills. 

The main job of CFPs is to help people manage their finances. This includes various tasks such as retirement planning, investment planning, choosing an insurance policy, and having a savings plan. However, the most important aspect of the CFP role is that they are a fiduciary of all your assets, meaning that they have to make decisions with your best interest in mind.

When compared to typical investment advisors, CFPs can be seen as all-encompassing. They usually look to evaluate your current financial situation, including all the money you have, your assets and investments, and your property. 

They do this to come up with an idea of what your net worth is. Normally, CFPs also look at your liability, like student debt or mortgages. After this initial stage, they work with you to create a financial plan intended to fit your goals for the future. This varies by the individual and could mean anything from having a great retirement plan that will last you until the end of your days to finding out how to save enough money for a college-bound child.

With the information we’ve given you so far, it sounds like CFPs are the perfect people to deal with your finances. Unfortunately, there’s a catch.

Nowadays, many financial advisors either don’t know how to trade or don’t think it adds much value, so they may take fees for simply managing the money without providing you with a real benefit. Along with that, a lot of the individuals who claim to be financial planners don’t actually do any planning at all. Instead, they take all the data you give them, then they input it into one of their systems that spits out a few investment ideas and a supposedly fitting insurance plan. Essentially, this is just a more complex Monte Carlo analysis that you’re paying for. 

Is That All Financial Planning Is? 

If you don’t know a lot about finance, you may think that this way of managing assets is completely fine. After all, isn’t the job of the financial planner to just pick the best options for your investments, regardless of how the prediction is made? Well, unfortunately, the answer is no. 

If all that was needed for financial planning was a good Monte Carlo analysis, then people wouldn’t get certified for the job, and it could easily be done by computers instead. Managing finances well takes more than just knowing how to do math or understanding the way the stock market operates. It also requires knowledge of how people think and operate. In many cases, the prices of stocks rise or crash because of the actions of humans and not for any logical reason that a computer can fully comprehend.

And so, even though financial analysis is extremely helpful and much needed, it’s only an information source that a good financial expert can use to make informed decisions. That means it shouldn’t be the entire service that you pay for, and with Alpha Wealth Funds, it won’t be. 

What Alpha Wealth Funds Does and Why It’s Special 

Unlike many financial advisors, we don’t just do a quick Monte Carlo analysis and then give you a few options on how to invest your money and what insurance policy you should sign. Instead, we take the practice of financial planning to the next level.

At Alpha Wealth Funds, our services range from financial planning and separately managed accounts to emerging hedge funds; however, our main focus remains on empowering and educating every single one of our clients. With us, you won’t just have someone making the financial decisions. Instead, you get a partner who is willing to explain to you the reason behind every choice. 

For most of our clients, we follow the 7-step comprehensive Financial Planning Process, and we offer all of the usual services that every CFP has listed in their portfolio. That includes things like evaluating your current financial situation, taking into consideration your future plans, and working on strategies for your retirement, savings, and investments. When you work with us, you will get results that you will be proud to share with your friends, colleagues, and family members. One example is The Insiders Fund, which was listed as the 4th best performing long-short equity fund in the world in 2019. 

Additionally, unlike many standard CFPs, we at Alpha Wealth Funds offer our clients access to exclusive products/services that are typically only available for the ultra-wealthy or family office. Furthermore, we don’t use a “one-size-fits-all” approach and instead tailor our services so that they’re suited to the needs of the client. By doing so, we ensure that client interests are protected and that we’re doing our best to constantly improve their financial situation instead of simply letting it float at the same level.

Our mission is to be the quarterback of your financial planning. We see no point in simply moving the same amount of money around and taking fees for that “work.” One of AWF’s CFPs, Chase Thomas, said it best: “The problem that I saw was that advisors didn’t know how to trade or were told that it was impossible to add value. And so they didn’t bother. They just wanted to manage people and passively take fees out. And I saw that as a horrendous travesty. If I was going to manage money, I was going to do it in a way that was going to add value or alpha to those accounts.”

In Conclusion

Hopefully, this article gave you key insight into what financial planning is, what CFPs are supposed to do, and why you need to be careful when choosing the person who will take care of your financial future. 

Nowadays, the market is so big that it can be hard to find a company or an individual that truly offers something remarkable to the client. When choosing who to work with, be sure to do your research so you don’t end up paying for more than what you’re getting.

If you’re looking for a solid partner in your financial planning journey, Alpha Wealth Funds is ready to help. We do our job for the love of finance and with the goal to help our clients understand and manage their finances better. We want to help each client achieve their own goals, regardless of whether that’s having a sound retirement plan or expanding their wealth.

Please feel free to reach out to me on this or any of your investment needs or questions. I may not always have the answers at my fingertips, but I promise I will get them for you. Michael Torrence

Calendly link Work: 435.658.1934 Contact: 330.284.3211
Michael Torrence – Investment Advisor Representative: Michael was born and raised in Ohio and attended The Ohio State University. After College, he was commissioned as a 2ndLt in the United States Marine Corps. He attended his initial training in Quantico, Virginia, then graduated at the top of his Primary Aviator Class and was selected for the Strike (Jet) Platform.

Founded in 2010, our services include boutique hedge funds, separately managed accounts, financial planning, estate & trust services, private placements and in-house concierge services for high net worth individuals, families, and businesses.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. All investments involve risk including the loss of principal.