How to pick a financial advisor?

[jimco]

With the wide range of knowledge displayed on this site,how would a machinist find a reliable financial advisor to handle a settlement?
Thanks

[Paul Alciatore]

There aren't any!

Paul A.

[speedy]

If you can find a financial advisor who is not too flashy, avoid him as he obviously hasn`t got the skills to invest wisely himself.
If you can find a financial advisor who has the trappings of success, avoid him as he is obviously fleecing his clients.
I hope this is of some help to you.
Ken

[Rich Carlstedt]

Boy are you smart asking ! most don't ..
1.Stay away from Insurance salesman ! Big Time ! I MEAN IT..they only live to get your money..ever notice who has the nicest buildings around..all built with your $
2.Stay away from someone who "will not charge you"( they give your business to companies using kickbacks..$$ and "Your" interest is the furthest from their mind..but not your $$)
3.Stay away from your bank...same as both of the above.

Do
Look for a Certified Financial Planner (CFP).
1. who charges as a % of the funds handled( like 1/2 or 1 % etc)upfront..so you know your costs.
2.has been in the community for a long time.(Lowers carpet bagger exposure)
3 Has references THAT you check !
4 Keeps the investments in "Your" name ( no 3rd party crap)unless it's with a VERY well known institution.
5. uses NO high pressure tactics...when they "push" you should Walk!( and don't warn them ahead of time .
Real CFP's point out issues and possibilites....no sales urgencies !.
6. You should reveiw their past performance..

Last..if it's to good to be true, it IS !..walk or you will lose it all.
The past 5 years have not been a cake walk..
if you see outstanding returns..be careful !

Don't be in a hurry.. read books , at least 4 before you undertake any major action..
and do not, do not say this"
I don't understand this stuff, can you help me"... That spells 'Sucker " to the sharks.

If you are still stuck, find a reputable "local" Tax firm that does books and taxes for local companies/individuals..they tend to know from their clients, who to look to and who to avoid...might cost 75 bucks for a "Consultation" but is worth it..
and get several names...to "consider'

[abn]

From what I have read and listened to, I would go to:

http://www.napfa.org/

And find a local FEE ONLY financial advisor. Fees may differ, but it matters that the advisor is fee only as some advisors may recieve commisions from the products that they sell you. I do not use a personal financial advisor as I don't really do lump sum investing (don't have the cash), but the question comes up often on the money programs I listen to. If you have a fast connection you could download or stream the last couple months worth of Motley Fool:

http://www.npr.org/programs/fool/

Find a station that streams Bob Brinker's Moneytalk: http://www.bobbrinker.com/

Many people when they get a lump some of money feel they have to act immediately, and may make moves in haste that they regret...The only thing that I think that you have to worry about immediately is any possible tax consequence (especially since we are so close to the end of the year). After that I would just put the money in an INGdirect savings account (FDIC indurance and a high yield for a savings account)and force myself to wait a couple months while I read/listen/and watch everything I can get my hands on financially in order to make an informed decision. Relax, think, enjoy.

[PSD KEN]

OR: the most logical option would be to transmit all your finances to me! They will be invested in a precise manner. (precisly babes, booze,limos, etc)

[This message has been edited by PSD KEN (edited 10-10-2004).]

[J Tiers]

Yes PLEASE, for your own good, go to a FEE-ONLY financial advisor, who should be a CFP.

DO NOT ask the sales types. They are told to sell this or that, and they have to do it or get canned. It is of no consequence to them if you are better off or not.

My wife is an actuary, and works for a Fee-only CFP. Call me biased, but they work for you. The other guys work for teh commissions that the funds pay when the money is invested.

NAPFA is the organization you want.

I have heard stories of the crap pulled by other "advisors".

One that comes up a lot....Putting an annuity or tax-free investments inside an IRA, for instance. Annuities shield from taxes to a degree to start with. Tax-free investments typically return less, so doing that is giving up several interest points, costing you money. That was done by the "other" advisor because the commission was better on the annuity than on the better investments...... That has been seen many times. There are lots of other stupid deals done for the commission. Stay away from commission sales folks.


Nope, fee-for-service is the way to go. Get someone who will work for YOU.



[This message has been edited by J Tiers (edited 10-12-2004).]

[J Tiers]

duplicate deleted

[This message has been edited by J Tiers (edited 10-10-2004).]

[Tim Clarke]

My Financial Advisor is a CFP named Gary Wilson. I shoot Skeet and hunt birds with him. A lot of other shooters use him, also. Given the risk factors included with having a large bunch of shooters as customers, I believe he is a honest man.

He says it's important to choose a guy who isn't forced by the parent company to sell the stuff they have got a deal on. I guess all the big houses, except a few, buy stuff at a big discount, and recommend it to the customers as first choice.

How you find that kind of guy, I'm not sure. I was lucky. But, on the other hand, you could keep my account in your pants pocket and still have room for your lunch.

Regards, Tim

[jimco]

Thanks to all for the responses.
This is the best information i have recieved .
Thanks again to all!!!

[bbfmetalworking]

I would avoid CFPs or people who call themselves "Financial Planners."

Ask your local friends to refer a good CPA instead. Good accountants will not only know how to count your money, but can give you a lot of common sense advise on how to invest wisely.

It's much easier to find an unbiased CPA than a planner. No matter what they might tell you, the vast majority of Financial Planners or CFPs have vested interests in telling you where to put your money.

[J Tiers]

bbfmetal:

That is the point of the "fee-only" type. The only money they get is from you. No commissions etc. So if you are not happy, they get less money.

Watch out for "fee-based" planners. They are a hybrid, taking money from you AND from commissions. No serious difference between them and a regular commission agent.

Regarding CPAs....they know about some things, particularly accounting. But my wife's outfit has had to disentangle lots of messes that CPAs have created, where they didn't get the best returns, etc.

The investment and accounting areas overlap, but are not the same.....what a CPA tells you should be honest, legal, etc, but may not be the best on a financial basis.