"Better to trust the man who is frequently in error than the one who is never in doubt."
-- Eric Sevareid, New York Times commentator and reporter, (1912-1992)
By JULIA ANDERSON
Let’s say you are leaving your full-time job and taking your 401(k) nest egg with you. Are you going to manage it yourself or will you turn to an investment professional?
If you think you need professional advice, here are questions to ask a financial planner/adviser before giving them your life savings. Treat this process like a research project. Take your time. Don’t be uncomfortable asking the uncomfortable questions. It’s your money, your future and your retirement.
Nine questions to ask when choosing or re-evaluating a financial adviser
- How do you get paid? A commission on product sales, fee per transaction, or both? Ask for details.
- Can you manage my assets for a 1 percent or less management fee?
- What’s your background and experience?
- What’s the strength of the company you work for or with?
- What do your clients say about you? Ask for references.
- What are your checks and balances regarding risk vs. earnings reward?
- Will you put your investment proposals in writing?
- What are the potential pitfalls of the investment products you are offering?
- What do other professionals say about you?
Ask yourself what your gut-level comfort is with this adviser. Do you come away feeling good about what you’ve learned, where you’re headed when you meet with him/her?
Don’t hire or continue to use a financial adviser just because they are nice. Do the math at least a couple of times a year. How are your investments doing in comparison to the performance of the S&P 500 (the 500 largest publicly traded U.S.-based companies)?
If the S&P is up by 15 percent year-over-year but your holdings are up only 7 percent in the same time frame then you need to be asking some tough questions. You might do better on your own or by switching advisers.
Studies show that women, while good at budgeting, bill paying and saving, may be less confident when it comes to investing and managing long-term savings. Get in the game, learn the basics. Make sure you are getting the best performance from your investments --- with or without an advisor.
I meet women all the time who face job and money transitions and who want to do them right. It’s about building confidence and taking charge of the future. This is your money. No one cares more than you do!
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