Archive for the ‘Financial Advisor’ Category

Why Hire a Professional Who Doesn’t Put Your Interests First?

Wednesday, November 11th, 2009

Jane M. Young CFP, EA

When selecting a financial advisor you want someone who will act in your best interest. To ensure this is the case hire an advisor who works to a fiduciary standard. A fiduciary standard requires your advisor to put your interests first even if those interests are not in their best interest. According to the National Association of Personal Financial Advisors over 90% of all investment advisors are paid (fully or partially) on commission therefore they are compensated for selling products. Additionally, many of these advisors are employed by a broker/dealer or an insurance company, where they are held to a lower standard of diligence. They are required, as part of that employment, to act in the best interest of their employers.

How do you find an advisor who will put your interests first?

Here are two ways to be sure you are hiring someone who adheres to a fiduciary standard. All financial advisors who are members of the National Association of Personal Financial Advisors (NAPFA) are required to adhere to a “Fiduciary Oath” as a requirement of membership. Additionally, both Federal and State law require that anyone who is a Registered Investment Advisor be held to a fiduciary standard. You wouldn’t accept less from your doctor or lawyer why accept less from your financial advisor?

Here is a link with more information on the fiduciary standard of care:

Http://www.focusonfiduciary.com

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Check out the new ACA Website (Alliance of Cambridge Advisors)

Wednesday, November 4th, 2009

Please check out the new ACA Website - Alliance of Cambridge Advisors .  This site contains several great financial planning articles.  http://www.acaplanners.org

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Four Financial Tips For Widows

Wednesday, November 4th, 2009

U.S. News and World Report - The Best Life
Comment By Philip Moeller

Posted: September 14, 2009

The Boomerater™ Report, our weekly collaboration with online baby boomer resource Boomerater, this week helps widows plan for their financial future while avoiding mistakes others have made. “My dear husband recently passed away,” a Boomerater member writes. “For 40 years he handled our finances and I’m lost without him. I want to make sure our savings last so that I have financial security. My husband was a wonderful handyman who could fix anything and he did most of the yard work. I am considering selling the house and moving to a retirement community. Also, I work full time, but am thinking of retiring or changing to a less demanding job. There are so many decisions to make, where do I start?” Here is what other members said:

Take your time—don’t make rash decisions. It may seem impossible to consider a normal future right now, but you will be amazed at how much strength you have. Please do not make any changes right away. Learn what you can about your finances and keep the bills up to date. But don’t make major life changes like retiring or moving in a rush. A great place to start to put things in perspective is a Web site run by the Women’s Institute for a Secure Retirement. They have a retirement calculator to help you know how much you will need to live, resources for estate and retirement planning, details about types of survivor benefits and Social Security, pensions, etc. Another good site is operated by the Women’s Institute for Financial Education, and focuses on women’s financial independence. Just having a place to start was a big help for me when my husband died.

Get help to develop a realistic plan. Take some time off from work if you can but I wouldn’t recommend changing jobs or moving right now. Don’t worry about fixing things around the house—most of that can wait. When the time is right, you’ll want to create a plan for your finances that suits you. It may mean you change jobs or move to a new home. To create a plan, you take stock of where you are now and look at your income and your living expenses. If you’re living on less than what you’re making—great! Otherwise you’ll need to scale back. Then, look at what sources of income you’ll have when you retire. This may include Social Security, pensions and other retirement accounts, as well as savings. A financial planner can help you estimate future medical expenses, determine when to start collecting Social Security, and when to withdraw from various retirement accounts. The National Association for Personal Financial Planners and the Alliance of Cambridge Advisors are two organizations whose members offer fee-only planning. It might make sense to contact a member near you to set up a financial review that could give you peace of mind now and a guide to help for full planning later when you’re ready to take that step.

Beware of Scams! Shortly after my dad died my mother was the target of a terrible scam by a con artist who preyed on widows. He called her, identifying himself as on officer of the court, and told her she had missed her assigned jury duty. When she said she didn’t know anything about it he treated her horribly, saying she was obviously trying to get out of her civic duty. When she became upset, he told her he would try to have the warrant for her arrest cancelled but would need her full legal name, date of birth and Social Security number. She gave it to him and now is a victim of identity theft. What a mess! Don’t give money or personal information to ANYONE.

Don’t turn your financial future over to your children. It is a big mistake to let your kids take over your finances. Count on them for emotional support, but not financial advice. My sister turned all financial decisions over to her son, who had no expertise. He made unwise investments and she also ended up paying more in taxes than she would have with a qualified financial adviser.

Read other member suggestions or add your own comment about financial planning for widows. Boomerater is an online resource for baby boomers, with local directories to help you find everything from an Atlanta financial advisor to Texas assisted living. The site also contains forums where boomers can post questions and swap first-hand experiences. If there are questions on your mind that you would like answered by other people who have faced similar situations, or you have advice of your own to share, go to Boomerater.com and participate in the forums. Say that The Best Life sent you.

To U.S. and World Report Site:

http://www.usnews.com/money/blogs/the-best-life/2009/09/14/four-financial-tips-for-widows.html

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Some things to be aware of when working with or selecting a financial advisor

Wednesday, June 17th, 2009

http://www.smartmoney.com/Investing/Basics/10-Things-Your-Financial-Planner-Wont-Tell-You/?page=4

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Is Your Financial Advisor Really Working For You? NAPFA Press Release

Tuesday, May 5th, 2009

 

 

 

 

FOR IMMEDIATE RELEASE                                                                Contact:  Benjamin Lewis

                                                                                                                                     Perception, Inc.

                                                                                                                                    (301) 963-7555

 

With a few basic questions, consumers can find out if

their best interests are being protected by their advisor.  

 

ARLINGTON HEIGHTS, IL (April 22, 2009) – As the events of the last several months have made clear, it’s never been more important for consumers to act in their own best interests when working with a financial advisor. Consumers must ask the right questions when selecting an advisor, AND they must keep asking questions on a regular basis.

 

The National Association of Personal Financial Advisors (NAPFA) has been a vocal advocate for the consumer for more than 25 years and is currently working with other industry organizations, congressional leaders and regulators to encourage increased protection for consumers   However, even if new reforms are put in place, NAPFA encourages consumers to protect themselves by being proactive when establishing or engaging in an ongoing relationship with a financial advisor.

 

Regardless of which advisor is chosen, a consumer needs to ask the following questions:

 

  • Do you work with an independent custodian? Whether your advisor is managing your money or you are the person who signs off on each financial decision, your advisor should not be holding your money. Your money should be held by an independent custodian company. Make sure you know the name of the company; how to contact the company; and your account numbers.  Be sure to open and review your monthly statements and check on the accuracy of any trades and withdrawals in your accounts.

 

  • Will I be able to review all transactions that are made? When you receive your statements, be sure you carefully look at all transactions. Make sure you understand each purchase, sale, deposit and withdrawal and why it was made. If you have a question concerning a transaction, call your advisor immediately. If you aren’t satisfied with the answer you receive, call the custodian directly.

 

  • Will I be able to make checks payable to the custodian?  When making a deposit to your investment account, write the check to the custodian, not to your advisor.  Be careful of advisors who ask that checks to be made out to them.

 

  • Do you require a General Power of Attorney?  The General Power of Attorney document will allow your advisor to remove money from your accounts without your special consent.  Typically a Limited Power of Attorney, which allows the advisor to make trades on your behalf, is preferred.  You may want to discuss your personal situation with an attorney. 

 

  • Can I have copies of statements sent to a family member?  If you don’t understand your statements, tell your advisor to send copies to a family member or another professional who can help you.

 

  • Stay in contact with your advisor. Visit with your advisor at least annually, and stay in contact by e-mail or telephone. If your advisor is vague or evasive, ask for more information. Holding these regular meetings has the added benefit of making sure that you and your advisor are clear about your financial goals, risk tolerance, and investment strategy. In fact, poor communication between client and advisor is a more common source of dissatisfaction than any type of illegal activity.

 

“It is not good enough today to simply judge a financial advisor based on what you read on his or her website or in a brochure. You need to speak with them,” said Diahann W. Lassus, CFP®, CPA/PFS, national chair of NAPFA.  “Advisors who are going to act in your best interests will be forthright and honest about how they operate and will truly act in a fiduciary capacity at all times.”

 

Consumers who are still unsure after talking with an advisor should review the advisor’s Form ADV, which is always available upon request. Additional information about a firm may be found on the Securities and Exchange Commission’s Central Registration Depository website at http://www.sec.gov/answers/crd.htm. 

 

To obtain a longer list of questions to ask an advisor, use the Financial Advisor Diagnostic, developed by NAPFA. The Diagnostic is available for free at http://www.napfa.org/tips_tools/index.asp.

 

“Consumers who take the time to ask the right questions and do the necessary research will ultimately become smarter consumers of financial services,” said Ms. Lassus.

 

If you are interested in discussing consumer protection, please contact Benjamin Lewis at (301) 963-7555 or Benjamin.lewis@perceptiononline.com.

 

 

About NAPFA

 

Since 1983, The National Association of Personal Financial Advisors (NAPFA) has provided Fee-Only financial planners across the country with some of the strictest guidelines possible for professional competency, comprehensive financial planning, and Fee-Only compensation.  With more than 2,200 members across the country, NAPFA has become the leading professional association in the United States dedicated to the advancement of Fee-Only financial planning.

 

For more information on NAPFA, please visit www.napfa.org.

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