|First of all, you may not need
a financial planner. You can learn about this
stuff just the way they did! Just the way I did! All it really takes
is doing some homework, digging up info and getting
recommend that you take the time to learn how to handle
your own finances and do it yourself. Today,
there are a ton of resources at your disposal. In
addition to the greatest site on the Web,
there are great books and TV shows on the subject (they
are listed at the bottom of my
investing strategies page.)
financial planner can certainly help, but a bad
financial planner can, literally, ruin your life.
It's YOUR money, so it's your
responsibility. Do your homework. But, if
you want some direction, here are some tips... Be
aware that I'm more interested in steering you away from
the creepies than anything else!
and most importantly, just about anyone can CALL
themselves a financial planner. There usually
aren't any rules about this. ASK WHAT TRAINING
THEY'VE HAS HAD! If all their training is from the
company they're currently working with, they are
probably just trained to sell whatever that company is
pushing. Seriously, the MAJORITY of "financial
planners" I've met are really insurance salesmen (and
women) -- see #3 below.
Ask if they are "certified." Again,
they could still be a clueless creepy... But, at
least, you'd know that they've had some official hoops
to jump through.
If they work for an insurance company, RUN!
They will only try to sell you expensive whole insurance
policies (they'll often call them "annuities") that are
disguised as savings or investment plans.
just a quick example: I was at an
office-warming party for a doctor friend of mine and I
started talking to a woman there... She introduced
herself as a "financial planner," which always gets my
"spidy senses" working. I wondered how long I could
keep her talking before the creepy started oozing out!
She started in
right away telling me how she really only works with
"high end clients" -- those who are worth several
million. Then, she started telling me how I'd be
surprised at how the rich invest. So, I bit and
said, "Oh, how do they invest?" She said that they
never really invest in the stock market or mutual funds, but that
they put all their money into WHOLE LIFE INSURANCE
POLICIES! Bwahahaha! That is SO not true.
As I smiled and nodded
politely, I was thinking, "Creepy alert! Run!"
I then asked her where she worked and where she got her
training. One guess... She worked for a big
insurance company and was trained by them. She
wasn't a "financial planner" at all -- she was an
Ask what their opinion is on "whole life
insurance." If they like it, run. If they
bash it, that's a very good sign.
If they work for a specific company that
sells mutual funds, etc., be aware that they may only
get paid if they sell you a product from that company.
In fact, they may only know about product from their own
company. Their services will be "free" to you
because they will make a commission on what they get you
to invest in! And guess where that commission
comes from? YOUR MONEY! They will sell you
front load funds! Yep, right off the
top of what you invest -- usually a whopping 5%. So, you already start out
in the hole.
If what they tell you sounds too good to be
true, it probably is. If they said something like,
"Oh, I have funds that are making 30%." Big red
flag. Be careful.
Listen to your gut. Did something
about the person, the advice, the office not sit right
with you? If it doesn't feel 100% right, keep
Make sure your financial planner listens to
what you need and answers all your questions so that you
really understand what's going on. Never sign
anything you don't feel good about or understand fully!
Get a recommendation from someone you know
and trust. Be sure that the person has actually
used the person's services and is not just a "friend" of
It's really best to hire an
independent financial planner. These are usually
called "fee only" financial planners meaning that they
don't work on commission. That is, one who doesn't
work for a big company that has products for them to
push. Of course, they're going to charge you
a fee. Hey, they have to make money somehow.
Always discuss fees before your first meeting, so you
know what to expect. And read
ahead of time so you know what the heck the person is
Again, it's your money, so it's
really your responsibility. Do your homework, ask
good questions and don't proceed with anything or anyone
unless you feel really peaceful about it.