| As with many companies today, brokerage firms are | | | | the time, or will earn him or her the most income? |
| struggling in this economy. Some of the large financial | | | | 5. Is your financial planner a member of NAPFA, an |
| companies, previously seen as staples in a powerful | | | | organization of fee-only fiduciaries committed to |
| industry, are fighting to stay in business. As a | | | | putting their clients' best interests above their own? |
| consequence, their stockbrokers have to worry | | | | 6. Is your planner independent, meaning he or she |
| about their own financial security in addition to their | | | | works only for him or herself and any clients, or does |
| clients'. | | | | the planner work for a large firm that is beholden to |
| This can create an issue for those clients; people | | | | executives or shareholders and could have earnings |
| who want personal, focused attention from those to | | | | demands that must be met? |
| whom they are intrusting their money and their | | | | 7. If your planner does work for a company, have |
| futures. | | | | you thoroughly researched the company and its |
| For this reason, it is important to determine if your | | | | successes, failures, and typical business practices? |
| financial planner, regardless of the firm's reputation | | | | 8. How many clients does your financial planner |
| and size, is working for you and your best interests, | | | | serve? How much time and energy does he or she |
| or if he or she is trying to "sell" you on the latest | | | | give to each client? |
| bonds, mutual funds and tactics that will net the | | | | 9. How often do you hear from your planner? Do |
| highest commissions or bonuses. | | | | you feel you are always the one making contact and |
| To help with this task, a list of 10 important | | | | checking in, even when things are going badly? |
| considerations is presented below. | | | | 10. Do you get consistent updates from your planner |
| 1. Is your financial planner a Certified Financial Planner? | | | | on the performance of your investments, and does |
| Securing this designation means the planner has | | | | he or she take the time to explain what everything |
| passed certain exams and is well qualified to deal with | | | | means? |
| clients' finances. | | | | Taking the time to review these items, and seeing |
| 2. How does your financial planner accept payment?a. | | | | how your financial planner matches up, will help |
| Commission - Receives an undisclosed percentage of | | | | determine if he or she is the right planner for you. |
| any funds, investments, trades, etc. made on your | | | | Decide what you want and expect in a planner, and |
| behalfb. Fee-based - May work off an established | | | | then analyze whether that is what you are getting. |
| percentage or hourly or yearly fee, but could also | | | | Be cognizant that you have every right-- in fact it is |
| accepts commissions, kick-backs, bonuses, etc. from | | | | your responsibility -- to change planners if you feel it |
| employers or other sourcesc. Fee-only - | | | | is warranted. |
| Compensated solely by a pre-determined fee for | | | | If during this particularly difficult economic period you |
| rendered services, instead of commissions, rebates, | | | | feel you should be receiving a higher level of service |
| awards, bonuses, or any other forms of | | | | than you are, it may be time to consider switching to |
| compensation | | | | a new planner. |
| 3. Did your financial planner sit down with you at the | | | | You may be content, and if so, that is the perfect |
| beginning of the relationship and try to get to know | | | | scenario for everyone involved. However, if you |
| you and your financial goals and needs? | | | | need a change, now is the ideal time to make that |
| 4. Does your planner make decisions based on your | | | | assessment. |
| goals and level of risk, or based on what is "hot" at | | | | |