How to Deal with Financial Advisers - Know Their Priorities

As your wealth increases, you will likely find that you are approached more often by someone who wishes to help you with your investing or retirement plans. Even your banker will want to help you more as your wealth grows. These people are generally referred to as Financial Advisers.

Financial Advisers come in many shapes and forms (I don't mean just physically ).  They each have their own motivations and desires. They are all being paid by someone and that someone in the long run is generally you, their client.

Many advisers work for a financial organization who market products and services. Their future in the firm will depend largely on how many clients they can accumulate as well as the total investment dollars they can bring into the firm. They can be paid directly by the organization or as a combination of commission and/or bonuses and incentives.

One important factor to remember is that the more business they get from you the more it will benefit them. They are in business for themselves and must feed themselves and their families in order to survive. It is a very competitive and sometimes ruthless business.

                                                                     Warning
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Unfortunately, because of the nature of this business, it has forced a few unethical advisers to actually break the law and steal their client's investment dollars.However, these instances are generally few and far between.  Most advisers are good people who truly care about their clients and their investment dollars.You should just be aware that these instances have happened and likely will continue to happen in the future.It's human nature. Beware.
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There are other Financial Advisers who charge an hourly rate for their services. These are called fee for service advisers and are generally fewer in numbers and have more experience and/or qualifications. With these advisers you will know your costs before hiring them.

Finding a good Financial Adviser who is truly looking out for your best interests is sometimes a very difficult task.It is always good to ask around and get recommendations from friends, family and co workers. Like most things you buy, you should always initiate the process and be wary of the Financial Advisers  that are approaching you. They are likely just starting out or need to increase their business.

If considering working with a Financial Adviser, always ask for other client referrals and always follow through by contacting those referrals. Also, you should always ask how they are being paid and how much they will make from your future relationship with them. Your relationship with them should always be a win/win situation.

A general rule of thumb when dealing with Financial Advisers is to use their advise (and maybe even give them some business) but never give them complete control over your investment dollars.Always retain control over your own money and know exactly what you are investing in. It's your future that is at stake.

As always I welcome your comments and suggestions for future topics.

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