Banks and financial institutions are abundant. Be sure to check their financial stability before committing your money to them. Several banks have been closed down, largely due to lax lending practices and consequent insolvency. It’s likely they aren’t going to be the last.
It is sad to say, but there are an awful lot of predatory so-called financial advisers around here.
Banks will steer you into their proprietary products which, while they might work out fine, are but a tiny slice of the opportunities actually available. Other so-called planners are just flat out thieves.
Be careful out there.
Financial advisers often offer a free lunch at their informational seminars geared to win over your money. If you don’t leave any investment money with them, if they don’t charge you a registration fee, and you have the patience to sit through their pitch, the lunch really is free; unless you want to be picky and count the time you spent. You might even learn something.
I recommend you stick with a fee only Certified Financial Planner (CFP). I’d skip the lunch, too, but that’s just me. It’s not the time. Nobody’s paying me for that. Simultaneously talking about money and eating gives me indigestion.
Another organization that is “fee only” is NAPFA (National Association of Personal Financial Planners). Some planners carry both the CFP and NAPFA designation: these planners have gone to a lot of trouble to keep their standards as high as possible through continuing in service training to maintain their certification and are committed to the fee only approach.
- CFP training covers a broad spectrum of planning needs from financing and insurance to investment strategies and annuities.
- The “fee only” designation means you will be charged a fee for services. This removes the incentive for the planner to steer you into commission paying vehicles that may be more in the planner’s interest than in yours. An often acceptable alternative is “fee reduced by commission” where the planner reduces his fee by the amount received in commission. If you can be assured that this actually happens.
Insurance companies compete for your dollars by offering new products and renaming old ones. Several insurance companies have been nabbed for illegal practices. A reputable financial adviser can help here.
Oh. I don’t need to tell you, do I, that insurance and your personal financial planning may not be compatible? Don’t fall for the “one stop shopping” approach that insurance companies often tout.
Also:
- Don’t get seduced by the promise of lower premiums alone. It’s the fairness of the company’s claim process that is important and that’s not always easy to check. Nevertheless, it is why you bought insurance in the first place. One place to start is to check out the complaints.
- The stability of the company is also important. There are a bunch of small companies you may have never heard of some of which might be just fine. Some not so fine. Go here for more on both banks and insurance.
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