Hello Ms. Savage. My wife & I are big fans. Been following your advice for years. Your are so knowledgeable. My wife & I (52 years old) are paying for our daughters' college tuition & preparing for retirement at the same time. A tough juggling act so we sought professional advice from a financial planner. The question is how do we know if she is a good/great planner & if her fees (1.65%) to manage our funds are appropriate? Her name is . . . . . & her office is in Schaumburg. She has her own business which is affiliated with Ameriprise.
Could you please give us some guidance. We like her but would like to know your feeling.

Terry Says:

OK, this is YOUR money and YOU are going to do the research!  The first step is to ask her if she is at all times acting as a fiduciary.  That means she fully discloses all compensation and is obligated to put your interests ahead of her own.  There should be a simple YES or NO answer to that question.  If she says yes, have her write that statement in longhand and sign and date it!  No, that’s not too much to ask.

Second, you should know whether the fee of 1.65 percent is ALL the charges you are paying –Or, for example, are there underlying annual fees for mutual funds, or purchase commissions on stocks you buy, or fees to liquidate securities or mutual funds.

Third, you need to know the difference between a financial planner and a broker or investment adviser.  For example, is this planner overseeing your entire financial life — making sure you have the correct estate planning documents, advising on tax issues, being concerned about how you are paying for college? Or is she merely selling investments and investment advice?

And next, you need to do the RESEARCH INTO HER BACKGROUND.  Go to www.CampaignforInvestors.org and read through the questions you should be asking an advisor.  THEN, click on the FINRABrokerCheck link and  on the SEC Investment Advisor link.  Search under her name.  I did that and found some interesting things.  Now, you do it and see if they bother you.

Remember, your future is at stake here.  You are not judging on how nice  the office is or whether you “like” the person.  My own take on the fees is that this is way too much to pay  for money management.  And that’s not even including any other fees you may be paying on the underlying investments.  For comparison, search at www.FeeOnly.org — the association of personal financial advisors who do not charge commissions.

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