Financial Advisor or an Investment Advisor by hkksew3563rd


									?We the investors of the world have provided the funds that corporate America has
needed to finance their growth over the past two hundred years in exchange for the
right to share in that growth and profits previously only afforded owners. The
investor/ management relationship has worked out so well that a whole industry
evolved to fulfill the growing number of investors needs for information and advise to
assist investors in making sound investment decisions. The Financial Services
Industry, which originally was only available to the very wealthy, has grown over the
decades to be the provider of investment information to roughly 40% of American

Most financial advisors are affiliated with large investment firms that funnel the firm's
collective knowledge, information and expertise to their cadre of advisor to pass on to
individual and institutional investors. In theory this gave those investors associated
with large firms potential for returns that could not be achieved on their own or with
an association with smaller or independent advisor.

Thus the Financial Advisor that advised you and me was actually taking the firms
"expert knowledge", adapting it to our sanitation and advising us where we should be
investing our savings to achieve our financial goals. We were told that since 1900 if
you stayed invested in a well diversified portfolio you would never have less then
when you started in any ten year period.

So what happened over the past decade? Most of us lost a sizable part of our savings
in the 2001 Tech Bubble only to loose more of our savings in the Sub Prime Bubble.
The $100,000 that we had in January 2001 shrank to $60,000 by October 2003 then
grew to $80,000 in July 2007 and is now worth $40,000 today. We're eight years
closer to retirement and wondering how we're going to survive if we ever do get to

Do we just plan on working for the rest of our life? Do we work until we can't then go
in Medicaid and welfare become a drain on the United States economy? Do we take
what we've got left and develop a strategy and lifestyle that will allow us to live out a
comfortable life without being a burden on or children and our country?

I personally think the last option is the best option, but it is going to take an
adjustment in our attitudes and lifestyle. One of the adjustments has to be in how we
look at the investment markets and out financial advisors. Whether you should change
Financial Advisors or not, now is the time to asses the performance of your current
advisor and decide if it is time to make a change. I am speaking of a Financial Advisor
not an Investment Advisor, there are less then 5% of the world's population that
should be seeking the services of an Investment Advisor. The investment markets are
not a place for most of us to turn to make money; they are a place for us to preserve
the capital that we have left and grow that capital at reasonable rates of return.
The first step in choosing your new Financial Advisor is for you to decide what you
want from your advisor after your attitude adjustment. Here are some of my
? Help me preserve the capital I have left and grow it at a conservative rate of
? Help me to live within my means and set an investment strategy based on my
needs and goals.
? Help me protect my family form the loss of my earning ability or my death.
? Help me and my family achieve our financial goals prior to retirement.
? Help me accumulate enough to enjoy a comfortable retirement.
? Help me assess my need for long term care insurance.
? Help me establish and estate plan.

Once you know what you want from your advisor you'll need to find a qualified
provider. As in all professions the first qualification you need to look for is education.
Your potential advisors will have a Series 66 or a Series 7 securities license as well as
an insurance license and a variable products license. A Series 66 allows them to sell
mutual funds and a Series 7 allows then to sell stocks, bonds, options as well as
mutual funds. A Series 7 is a more in-depth course of study then the Series 66, so I'd
eliminate anyone who doesn't have a Series 7 securities license.

Seventy percent of the people representing themselves as Financial Advisors stop
their education beyond their licenses and their required annual continuing education.
It's the other 30% of the advisors that you are looking for. These are the people with
initials behind their names representing professional designations. At the top of this
designation pecking order is the CFP (Chartered Financial Advisor) designation. A
CFP is comparable to a master's degree in financial planning; it takes three years of
study and at least three years of practical experience. To find a CFP in your
community go to: Other designations like the ChFC (Chartered
Financial Consultant) and CLU (Chartered Life Underwriter) are focused on specific
segments of the financial advisory field. These designations are comparable to Board
Certifications in the medical fields, and I personally would not put my finances in the
hands of anyone who doesn't take their profession seriously enough to seek all the
education that is available. This search can leave you with a list of three to three
hundred depending on the size of your community. I suggest that you check a website that lists the best of ten professions across the United States.
This should help you bring your list down to a manageable number of qualified

Next go to the NASD (National Association of Securities Dealers) website and look
up          your         short        list         of        qualified         advisors.
( Here you'll be able
find out your potential advisors work history, license history and if they have had any
legal or disciplinary action brought against them. We've gone through some pretty
tough financial times over the past ten years and a lot of good advisors have been sued,
so use this information as a means of asking your potential advisors some tough
questions. "Can you tell me what these issues are about?" Now Google your short list
and see what you find; you'll be surprised what you'll learn.

At this point, you need to sit down with those left on your short list. Here is a list of
questions that you should ask.
? What is your approach to financial planning? If they don't address the "Help me"
points above their not a Financial Advisor. If they start talking about Managed
Accounts, Sector Investing, Momentum, Technical verse Fundamentals, or Option
Strategies your talking to and Investment Advisor.

? What was your book of business worth on March 1, 2008 and what is your book
of business worth today? Can I see supporting reports? Their going to ask to see your
finances, it's fair for you to ask to see theirs and if it's down more then 25% you're in
the wrong place.

? How are you paid? There are only three possible answers here; commissions,
asset base compensation, or fees. Most will be a combination of the three possibilities;
the one that you want to watch out for is commissions. Commissions can create a
conflict of interest. Asset based compensation means as your assets grow their
compensation grows or as your assets go down so does their compensation. I liked
that it results in a common objective. Fees will involve special work like a financial
plan or a research project relative to your specific situation, and that's fair.

? How often will we meet to review my situation? This needs to be at least twice a

? Tell me about yourself. How long have your been in the business? Do your have
any professional designations? Have you had any legal or disciplinary action taken
against you? What is your employment and education background? Have you written
any books or articles that I can read? You know all the answers, just sit back and

If you'll follow this process you'll find the Best Financial Planner for you. You may
end up with the person that you've been using, but you now know they are qualified to
provide you with the service that you need from your new Financial Advisor.

Choosing your Best Financial Advisor can be as important as choosing your Best
Physician, so do your homework and then take responsibility for your decision. As is
managing your health you have to take an active role in the management of your
finances; stay involved and understand everything.
Kerry is the owner and developer of , and . Both websites are dedicated to the
recognition of intellectual and professional excellence. lists over 60,000 of the best professional service providers in ten
professions including doctors, lawyers, dentists, real estate agents, vets, physical
therapists and financial advisors. strives to identify the smartest people in the United States while
promoting individual intelligence as the U.S.'s greatest asset. "Everyone should know
their SUS Score."

Kerry has spent the past fifteen years in the securities industry, the past four years as a
consultant on building a successful financial advisory practice.

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