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| How can I find an adviser I trust? | |
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| Tweet Topic Started: May 9 2014, 09:01 AM (223 Views) | |
| Liquid Sky | May 9 2014, 09:01 AM Post #1 |
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It can be daunting to entrust your financial future to a stranger. And it's tough knowing where to turn for help because a changing marketplace has blurred the line between insurance salesmen and your stockbroker. So what should you look for? Well, for starters you'll probably want to hire a planner who's earned credentials. But brace yourself; there are a lot of them, and figuring out what they mean can be daunting. You might want to look at those that actually require a substantial level of knowledge before the designations are awarded. These include the CFP (certified financial planner), the PFS (personal financial specialist) and the CFA (chartered financial analyst). Planners with these designations at least have a proven level of competency within financial planning and investing. For more see What kind of credentials should a planner have? To come up with specific planners, first ask for references from friends and colleagues. But you also have to be careful that you have similar financial needs as the person who gives you a recommendation. Failing that, you can head to the Financial Planning Association, which lets you search for planners by location or specialty. Seek out financial planners who have a CFP. At that point, your job is half done. The Financial Planning Association does not verify credentials; it just lists planners. You'll next have to verify a planner's CFP status and background with the CFP Then set up interviews with three or four planners. Ask them an array of questions designed to help you understand their process and fees (there's a good list here). Ultimately, be sure that the planner you choose is someone with whom you can talk frankly - after all, you're going to trust this person with your valuable financial information, as well as your goals and desires for retirement. What kind of credentials should a planner have? There are at least 100 financial designations, and many are just empty titles that don't mean much. The title "retirement specialist," for example, is a made-up label that has no backing from any industry group. The popular C.S.A. credential comes from a real organization, the Society of Certified Senior Advisors, but merely indicates that the "expert" studied how to communicate with (and market to) seniors. Earning the "certified retirement financial adviser" credential does involve financial training, but it's a self-study or four-day course and only requires passing a 100-question multiple-choice exam. (The group that grants the C.R.F.A. is owned by a firm that sells a seminar for marketing annuities to seniors, which doesn't inspire confidence either.) The ones you want to look for are the ones that take a significant amount of time and expertise to master before the designation is awarded. These include the CFP (certified financial planner), the PFS (personal financial specialist) and the CFA (chartered financial analyst). Planners with these designations at least have a proven level of competency within financial planning and investing. To earn the CFP credential, for example, a planner must pass an exam that tests knowledge of insurance, investment planning, tax planning, retirement planning, employee benefits and estate planning. But many other designations are engineered to lend credibility to the planner. When you see some initials after someone's name, look up that designation on the Web. Find out how difficult it is to obtain. If it looks easy, yet the planner brags about its meaning, you might want to steer clear. How do planners charge? Generally, you face three basic billing structures: Fee-only planners are paid only for the advice they give. They do not earn commissions by selling financial products such as life insurance or mutual funds. Fee-based planners earn fees from advice and they make commissions on some of the products they sell. Commission-based planners make money from the products they sell. What kind of planner should I hire? If you're looking for big-picture advice, there are a couple of key advantages to going the fee-only route. First, you don't have to worry that your planner will limit her recommendations to those investments that will line her pockets and empty yours. Second, you get a better idea of how much you'll be paying for advice. But there are differences in how fee-only planners bill clients -some charge flat fees while others charge a percentage of the client's assets. And there are potential perks and pitfalls to hiring someone whose paycheck depends on what you're worth. On one hand, they have great incentive for you to make a lot of money. On the other hand, the setup gives them an incentive to urge you to invest rather than pay off a mortgage or other debt. So these planners may pay more attention to assets under their direct management rather than a client's entire financial situation. How much will a planner cost me? It's really tough to say. Planner fees vary greatly and depend on how they charge, how much money you have, and what type of services you need. But here are some basic guidelines: With commission-based planners, it obviously depends on the investments you buy and how much you invest. Fee-based planners also vary quite a bit. Most fee-only planners charge a percentage of the money they're managing, usually about 1% to 2% of clients' assets. The more money you have, the smaller percentage you pay and the more room you have to negotiate the fee. Some fee-only planners charge an annual retainer or a flat fee. What that flat fee is can rage greatly based on your assets, and the type of planning you need. An overall strategy with ongoing asset management, for example, would be pricier than a one-time estate planning session. Other fee-only planners charge hourly rates. These types of planners are fairly rare, but you can find some on the Garrett Planning Network. Hourly rates average about $100-$400. Is that a lot? Depends on how much of your money the planner is overseeing, and whether the planner is also charging a percentage of assets in addition to the hourly rate. In any event, always get an estimate of the total hours you'll be billed before you hire a planner who bills by the hour. http://money.cnn.com/retirement/guide/gettinghelp_basics.moneymag/index3.htm Edited by Liquid Sky, May 9 2014, 10:48 AM.
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| AquarianLove | May 9 2014, 10:06 AM Post #2 |
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Great article |
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| Wilderh9 | Apr 1 2017, 01:26 AM Post #3 |
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Quite an informative post on finding an unbiased advisor. Last month, took services of a renowned and registered investment advisor Las Vegas. He gave amazing information on how and where to invest along with its risks. |
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