Securing Financial Future

Questions to Raise

When dealing with an investment broker, advisor, or agent, how certain questions are answered can point out reasons not to work with those individuals. For instance, asking them what methods of compensation they work with, fee-based, or commission, as such if they outright refuse to discuss or even hurry through their explanation, this gives just cause to walk away immediately. The thing to keep in mind is that as an investor, you are the boss, which means, that the adviser works for you and should be completely transparent about how they are compensated for their services.

Looking into this aspect further, if they receive payments via commissions from selling products they need to prove there is no conflict of interests. What may occur is they would try to entice an investor to spend money on something that provides a higher commission for them. This is one issue when dealing with brokers or advisers that work with third party entities. It is their intent, if they are legitimate to put their customers’ needs first. While most planners design their services to receive payment for advice it is best to keep control over the amount of money paid for a given financial plan. What should work is having a plan separated into smaller sections where the outcome is easily visible. This way it puts a limit on the amount of monies transferred into the financial plan for the onset instead of making a one-time larger investment on a plan that shows little to no gain.

Always Stay in the Loop

It will pay to stay on top of anything and everything an advisor is doing. Always make sure you understand any pros or cons about any type of suggested investments and ensure you keep a close eye on the ‘paper trail’ and that you scrutinize all billing statements and account balances they provide. Additionally, if these reports are received only from the advisor, ask why, there should be reports coming from other sources, such as the companies, mutual funds, or annuities that are part of your portfolio. If not, then something is being hidden from you.

As far as what they are suggesting what, in their minds, is a good investment, they should allow you plenty of time for you to research it on your own if you feel the need. Additionally, it helps for them to explain why, how and what makes their decision on a given investment viable for your portfolio. If they attempt any form of pressure this indicates there is something they are not telling you. The breakdown of your portfolio should be understandable in addition to the amount of fees that go for the advisor’s compensation in addition to where these fees are coming from.

Part of your discussion of an investment strategy should include real time information about the trades that occur germane to the management of your portfolio. This means that they disclose all gains and losses that impact the integrity of the investment fund.

It is a Case of Buyer Beware

Common sense dictates that when money is involved, it behooves us to investigate all avenues of a given situation before making any final decisions on where the money goes. The favorite targets for unscrupulous financial planners, brokers, or advisors are the elderly and the uninitiated to the investment markets. Therefore, never act on emailed investment options or those received through snail-mail, (your mailbox). Always ask probing questions into the reasons certain investments out weigh others, and always read any paperwork put in front of you before you sign it. Remember, investing in anything is risky and nothing is guaranteed specifically anything to do with mutual funds, stocks, bonds, annuities, or even real estate. Do your due diligence before hiring a financial planner, advisor or agent. It can save you money

Diagnose Your Financial Health

  • Check your credit score. This is one of the utmost priorities because having a good credit rating makes you a reliable borrower and your credit opportunities is wide. The chances of being rejected with loan application also becomes low.
  • Check your savings. The amount of money you save must mean something. For example, can your rely on it for daily expenses and other expenditures if you no longer have a job? For how long? Can I withdraw a portion and invest it somewhere else without making you financially insecure? There are situations when interest on savings are really low that it is pointless to save. These are some of the questions that you need to ask about your savings.
  • Check your investment. Let us presume that many of your investments are for the long term. However, you need to determine if you can easily convert it to cash as soon as possible. If so, by how much? Also, you need to check your investments and see if you can sell some in order to prevent huge losses if some of your stocks are affected by current economic conditions.
  • Check your credit availability. What are your sources of credit if you encounter emergency situations? Indeed, it is quite ironic that sources of credit are one of the indicators of financial health. Financial management teach us that in some cases, it is more financially rewarding to take out a loan instead of divesting assets to generate cash. For example, why unload your stocks if it is earning 30 percent per annum on dividends when you only need several hundreds and there might be some friends who are generous enough to lend you the money interest free?

There is nothing wrong if there are borrowers taking their chances with cash advances and other types of instant loans. It is a matter of choice and there are reasons that they do so. One of such reasons could be that they cannot divest their investments and convert it to cash as those are earning huge dividends so they are better off clinging to such stocks and relying instead on cash advance as the means to solve temporary cash problems.

Advantages of Using a Financial Planner

Saving Time

Even if you feel confident about your ability to handle these tasks, managing these issues can take time and effort. You can streamline your own schedule and avoid spending time on this work by hiring a financial planner to do it for you. This can be especially helpful for people experiencing a high volume of work professionally or for people with time-consuming family responsibilities.

Peace of Mind

Knowing that you have a professional working for you to manage these important details can be comforting for many people. The expertise applied to your finances can ensure that you plan and strategize correctly to work toward your goals. Without this expertise, you might make costly mistakes. With the assistance, you could even achieve your goals more quickly. You can also enjoy the confidence that comes with knowing that the professional will be continually monitoring and reviewing your situation. If any modifications are necessary, you can contact them quickly to correct the situation.

Expert Analysis

It is easy to be overloaded with information in today’s Internet age. Anyone without expertise in this specific area may have difficulty assessing this data accurately. A financial planner can provide expert analysis and planning for assets and liabilities, as well as insurance, taxes, and investments. Consumers usually have different priorities during early adulthood than they have in later ages, so planning and strategy vary. Having a professional opinion about investments as they pertain to short-and long-term goals and individual ability to withstand risks can also be invaluable to consumers.

A Cool Head

People may panic or become excited in certain circumstances. Fluctuations in the financial market may lead you to want to jump into investments with both feet or pull everything out to protect yourself against major losses. In either situation, a professional will lend solid expertise to help you make the correct decision. Perhaps it would be best to wait it out. Or, moving quickly might be the best course of action. The calm expertise of a professional who is not emotionally involved with the issues will deliver the best outcome.