National Association of Personal Financial Advisors (NAPFA)

The National Association of Personal Financial Advisors (NAPFA) is professional association for U.S. based fee-only financial advisors. Formed in 1983, NAPFA requires its members to adhere to the organization’s code of ethics and take an annual fiduciary oath. Members must provide independent, objective financial advice to their clients and uphold the highest standards in the financial planning profession. They must earn their income from fees, not commissions.

Financial planners can be broadly divided into two categories: 1) those who are compensated with commissions from recommending specific investments to clients, and 2) those compensated with a fee for providing objective investment advice. NAPFA requires its members to be paid in fees rather than commissions, because an advisor who is paid in commissions has an incentive to recommend the investments that he or she receives the highest commissions for, rather than the investments that are best for the client. By charging an hourly fee or a fee based on a percentage of the client’s assets under management, the advisor’s incentives are aligned with the client’s incentives. NAPFA members are also prohibited from receiving referral fees for sending the client to another professional. NAPFA's stated values are:

• To be the beacon for independent, objective financial advice for individuals and families.
• To be the champion of financial services delivered in the public interest.
• To be the standard bearer for the emerging profession of financial planning.

NAPFA has three key policy issues/positions that govern member conduct and inform its overall mission:

• Recognition and regulation of financial planning
• A uniform fiduciary standard of care
• Greater investment advisor oversight

NAPFA has additional requirements for its members. They must strive to provide objective advice and avoid giving advice in areas they are not knowledgeable in. They must keep all client information confidential unless the client authorizes sharing information. NAPFA members are required to earn continuing education credits to keep their knowledge and skills current. Financial advisors who join NAPFA must additionally be transparent in their interactions with their clients and do their best to ensure that clients understand how their money is being managed. NAPFA members are also required to act in a way that reflects positively on both NAPFA and the financial planning profession. To become a member, see NAPFA's Application Process.

NAPFA's website provides several resources to both financial advisors and investors, such as a "find an advisor" feature, consumer financial education resources, and guides to fee-only advisors and advisor selection. NAPFA holds member conferences that feature professional development and networking opportunities, virtual learning resources, awards, and chances to meet, interact with, and learn from other advisors.