Choosing a Financial Planner or Investment Advisor (HowTo ?)

Mar 24, 2019

  1. LostDollar
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    LostDollar Guru

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    How should a person with no financial planning or investment management knowledge or experience go about making a WISE choice for a person to involve in their financial lives to provide guidance and assistance in the conduct of planning and investment matters?
    Thanks.
     
  2. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    I wouldn't really know other than to have an appointment and let the planner/advisor ask a lot of questions to ensure that they understand your situation well enough to make proper recommendations.

    For every other "guideline"... there's examples of stupidity:
    - "Only work with a fiduciary"... Madoff was a fiduciary. Fiduciary does not mean competence. It means that they can be held to a higher standard for their investment recommendations.
    - "Only work with a CFP"... there are plenty of CFPs that don't know what they're doing.
    - "Never pay commissions"... but what if the commissioned advisor helps you better and cheaper than the fiduciary?
     
    DHK, Mar 24, 2019
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  3. toolbelt
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    toolbelt Guru

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    It also means they have a legal obligation to work in your best interests, which is a good fundamental starting point during the selection process.
     
    toolbelt, Mar 24, 2019
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  4. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    Only in the areas of securities and portfolio selection. Everything else is considered an "outside business activity". Insurance, commissionable securities through a broker/dealer, etc., all have suitability standards, not fiduciary standards.

    Unless you sign an engagement agreement for a contract of services... you are not working with an advisor under the fiduciary standard.

    Even designations (CFP, ChFC, etc.) or association memberships with codes of ethics, are all ethical standards, not legal standards.

    However, by promoting yourself at a higher level, you are then opening yourself up to being held accountable at that higher level.

     
    DHK, Mar 24, 2019
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  5. mickeyma
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    mickeyma Guru

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    I went with Charles Schwab company. Low fees. Lots of different plans. Two MBAs assigned to my account and we meet every 3 months.
     
    mickeyma, Mar 24, 2019
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  6. LostDollar
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    LostDollar Guru

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    Thank you for the suggestion.
     
  7. Life Hawk
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    Life Hawk Guru

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    As in all areas of life... you need to be a self learner. No, I am not suggesting doing it all yourself, but I am saying on topics like rearing children, marriage, health, financial issues and others of an important nature you need to put some study time in on your own. Don't leave the important matters up to others. Let them give you direction or show you how, but your knowledge base should be broad enough in the area that what they are suggesting makes sense and can be verified.

    In the end... you will be the one responsible. I will choose experience and track record above education every time. Always remember, the old "uneducated" farmers of old fed the country.
     
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