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FINANCIAL PLANNERS
500,000 so-called professional planners advertise themselves as personal financial advisors but too many may be potentially clueless and ethically challenged or essentially be peddling incompetent advice. To become a personal financial advisor anyone who can afford business cards can be called a "planner". Only about 10% of all of these so-called professionals may even be qualified to be giving financial advice!
Due to sophisticated computer software available today, planners can create slick-looking charts and graphs that are highly questionable, cookie-cutter financial plans. Consequently, always compare the qualifications of at least three planners before ever choosing one because this particular industry is unregulated.
Remember, a "fee only" financial planner may be your best bet and not one who works on commissions, because anyone earning a commission may press you to buy into costly, highly suspect investments and insurance policies. You may have to turn to a professional group for a referral to find a good financial planner. Maybe try calling the Institute Of Certified Financial Planners (ICFP) toll free at 1-888-237-6275.
Regardless, always consider having a lawyer or a certified public accountant (CPA) review your planner's recommendations. Never allow any planner to make trades without your consent when buying or selling stocks and bonds. Beware of financial advisors who supposedly work for free or at an extremely low cost. Later, they may try to get you to buy insurance policies, investments or limited partnerships from which they may derive hefty commissions.
Incidentally, just because a planner may represent some nationally known and well-respected company does NOT automatically mean you will get good, adequate, competent, well thought out financial advice. To find a good planner, ask the advice of people who have no vested interest in your finances which may possibly be the wisest advice.
SUPPLEMENTAL SOURCE: CONSUMER REPORTS MAGAZINE JANUARY 1998
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