Following EMC Squared to Choose a Financial Planner
After we have reviewed our potential Financial Advisers Ethics(See the Opening Article Titled When it Comes to Financial Advisers Follow EMC Squared), we must now consider the financial motivations that motivate our financial planner.
M - Money
Once you have the full disclosure then you need to follow the money. You need to understand your financial planners monetary motivations.
- How do they make money from helping you?
- Do they earn an investment commission from investment companies, banks, insurance companies or some other group? If they push your money into an account. The last thing you want is a financial planner that might benefit from churning through your investments continually finding a slightly better investment, but charging your actual earnings away in commissions and trading fees.
- Do they earn money per transaction? - This could lead to a planner that may churn your investments in and out of securities, receiving a transaction, but not helping you earn more money.
Look for Fee based advisers or planners and insure that you have the specific services you will receive detailed in writing to include:
- How many times per year will you meet?
- Who will meet with you (The adviser, a junior representative, a secretary, a call center rep, no one)?
- Will you meet face to face?
