Finding a financial planner
By Larry Lane for InvestorZoo.com There’s an old saying “Those who don’t plan, plan for failure”. Hopefully you‘re notthe investor who decided you’ve had enough and sold at or near the market lowsthis year. Do you have a long term investment horizon of 15 years or more buthave cash stashed in “safe” CDs and money markets? Can you afford to invest in aCd or bond paying 1-3%? Inflation and taxes will eat up a majority of your returns. You need to find a good financial planner to walk you through today’s complicatedinvestment world.Before you find a financial planner, know what you want your money to accomplish.Is this short term money that you cannot afford to lose or is it long term money youcan use to invest? Knowing what you want your money to accomplish is the firststep to successful retirement planning.
Interview the Candidates who get to manager your hard earned dollars
The best way to find a financial planner is to ask one of your successful friends,colleagues or co-workers for a referral. Once you have gathered a list of a fewfinancial planners, it is time to set up a meeting. Any good financial planner will holdan introductory meeting at no cost. Remember this is your time to interview thecandidate who will hold the key to your long term financial success. You shouldconsider this a job interview. You are looking for the candidate who will make yourmoney work the hardest and provide you with the best long term return.
Find Out How They Are Paid
Financial planners can be compensated in a number of ways. You will want to besure they are advising you with your best interests in mind, not theirs. Financialplanners are sales people which are why they have to be licensed and accountableto an oversight organization.•Straight Commission –This has traditionally been the most common wayfinancial professionals are compensated. When you purchase an investment, apercentage of your total purchase will be deducted from your investible assets anda portion of that will go directly to your advisor.•Flat Fees – Another common method of compensation is through a flat fee.Some will charge an hourly rate or may charge a flat overall fee for putting togethera financial plan for you. Typically, there is little concern for a conflict of interestsince they are getting paid whether you purchase any investments or not.•Fee based on total assets –Some financial planners charge an annual fee thatis based on a percentage of the assets you have invested with them.