As the news that Ford will be offering buyouts to some of its workers has come out, financial planning types are vying for a piece of the business.
At least half a dozen brokerage and financial-service companies have called trying to market their services to local Ford employees, [president of UAW Local 919 Chris] Kimmons said.
Reading thru the article, two thoughts immediately came to mind:
- A fool and his money are soon parted.
- There’s a sucker born every minute.
After more than twenty years in practice as a CPA, I have seen my share of horror stories – some big, some small. The driving force behind these stories is usually greed, either on the part of the investor or the financial advisor. There is a lot of truth in the statement “if it sounds too good to be true, it probably is.” The key to me is that looking for a financial advisor requires patience.
Those who are obtaining large sums of money for the first time in their lives are particularly vulnerable to the sharks out there, but even long time investors get taken advantaged of. I find myself often having to contact the children of my elderly clients who find themselves in these situations. I can’t tell you the number of times that a client has talked to me after making a bad investment with a financial advisor who was a “friend.”
Choosing a skilled planner, adviser or broker from those who are poorly informed or dishonest can be a challenge because the expertise, credentials and ethical behavior of advisers vary so widely.
Friends are friends, but business is business. If you have no experience with dealing with a financial advisor, you have some homework to do first. Take a little time to learn the difference between a stock broker, a financial planner, a certified financial planner, a “financial advisor”, an accountant, and a certified public accountant. Learn the differences between how they get paid. Learn about different types of investments, like stocks, bonds, mutual funds, CDs, and annuities. Figure out what your goals are.
Then start by asking the people you know and respect who they use. Get several names and interview them. And then choose someone that you feel comfortable with, that you can trust.
Don’t be a sucker.
VIVIAN J. PAIGE | All Politics is Local 
Good advice Vivian, I hope there are people that read and follow it.
Just go to Schwab. Buy and S&P ETF or maybe an ETF bond fund and forget about.
Um, that may work for you but there really is no such thing as “one size fits all” financial planning.
Yeah, you have to take longevity into account, no doubt. ETFs and index funds are the answer for anybody that doesn’t know anything about finance. Opening an account at Schwab or E-Trade is simple. You do have to allocate between bonds domestic stocks and international stocks, but that’s figure outable. But you can buy 3 ETFs and just re-allocate between these assests once a year or so. Annual transcation and account maintenance costs should be less than $100 (your broker will hate you). “Financial Advisors” are basicly unregulated and finding a good one is hard. If you don’t know, just put 33% in each of US domestic index S&P or total market index ETF, 33% in foreign broad market stock index ETF, and 33% in Lehman Brothers bond indexed ETF. Real simple. If you’re older, put a little more into bonds.
Real simple but it took you quite a few words to explain it 😉
It is not true that all financial advisors are unregulated. Securities dealers have licensing requirements, and are quite regulated. Even so, there are unscrupulous folks with the proper licensing that will do whatever it takes to separate you from your money. That is why the selection is so important.
Good financial advice would not be simply to split your money into 3 pots. That may end up being a result, but there are many other possible results. Longevity is just one of the many factors to look at.
I don’t recommend “do-it-yourself” financial planning any more than I recommend “do-it-yourself” surgery. There is a reason why specialists exist in every field. DIY financial planning is often a case of being penny wise and pound foolish.
Oh – and I’m not a financial planner, either.
Two words : indexed ETFs