Choosing a financial planner is a very important decision. Who will you trust to handle your life savings and plan your financial future? The fact that someone claims to be a financial planner does not qualify him or her to handle your money. They must have the proper certification, experience and knowledge.
The Four Cs of choosing a financial planner
1. Credentials
ทWhat certifications, college /university degrees and experience does he/she have?
ทHow many clients or how much money does he/she handle?
ทMake sure the planner is registered with the Investment Dealers Association in your area or Certified by a Government body
2.Compensation
ทHow are you compensated? Flat fees, salary or commission? (Beware of those who earn big commissions for placing you in high risk funds)
ทAre there any hidden underwriting fees with my investment fund?
ทWill you explain all the cost involved with each investment?
ทWhat is the cost of liquidating or canceling my account with your firm? (Good to know, if you decide to switch funds or investment companies)
3.Characteristics
ทWhat is your investment philosophy?
ทDo you focus on domestic markets, foreign market or both? (Answer should be both)
ทWhat is your specialty? Your strongest area? (Global portfolio management, no load mutual funds, stocks, bonds etc)
ทHow do you view risk and how does your philosophy fit my risk tolerance?
4.Customer service
ทWhat services does your firm offer?
ทHow accessible will you (the agent) be?
ทWill you review the funds last 5 to 10year performance in the prospectus?
ทWhat has been your year-to-year investment performance?
ทWhat was you worst year? Best year? And why? (Look for defensiveness or humility after raising this question, it reveals personality type)
ทDo you offer financial planning, money management or both?
In conclusion, a financial planner works for you, and should be compatible with your personality, risk tolerance and financial goals. Make sure that your hard earn money is in good hands. Interview potential planners, ask for references and call at least 3 of those references.
Richmond Acheampong
Web Editor,Co-founder
Parent Tree
Online Family Resource
http://www.parenttree.com
Richmond Acheampong is one of the co-founders of Parent Tree online family resource. A web site devoted to providing resources for families thru relevant articles, the Parent talk advice panel, products and links.
[tags]financial planner, parenting resources, family[/tags]
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