Warning Signs of a Bad Financial Advisor P. 2

Welcome to Part Two.

This is a continuation of last week's post. Please go over here to get the actual post of Suze Orman.

We said that we'll use her 10 signs and compare it to the local setting. Let's move on.

7. They Want to Meet with you Alone

Your advisor needs to understand you and your partner’s financial emotions. If you’re married, have a life partner or are responsible for someone else’s finances, the advisor should never want to talk to you alone. Suze says, “Any advisor that wants to see you alone – something is wrong.”

My take -

Of course, it's obvious that this is applicable when you're planning your finances with your fiance, wife, or even your parents. Still, if you're just planning for your own finances, it's always nice to bring along a friend or a colleague. It always helps when somebody plays the devil's advocate.

6.They Don’t Ask About Your Needs

For example, your advisor suggests what you should invest without asking you questions such as - do you have credit card debt? Are you healthy? Is your job secure? Do you want to buy a home? Do you have will? Do you have a trust? Do you need a new car?, etc.,.

My take -

I couldn't agree more. Local insurance agents, real estate brokers, financial advisors just tell you that you have to invest, but do they guide your decision? Real estate is a good investment, but do you need it now? A mutual fund is nice to have, but are you ready to take on the risks?

Before you plunk down your hard earned money, consider the following pointers -

a. Pay your debts first. However, this is just a general rule. There are debts that are okay to
postpone paying if the money for debt payment can be used to invest in something that
earns you more.

b. Set up your emergency fund.

c. What exactly are you investing for? Retirement? A house? An MBA degree? A business?

d. If you should get sick, do you have enough funds or have health insurance to cover
yourself?

e. Ask for a second opinion. Most often when you're afraid of telling somebody you trust
about where you're going to put your money into, it's driven by two things - fear or pride.
Fear is fear of rejection from your peers and family. Pride because you know you're unsure
about it, and you don't want to hear somebody else confirming your doubts.

f. Are you taking care of somebody sick?

g. Ask the financial advisor if he has purchased any of the product he's selling. If he hasn't,
why?

A needs and priority list should be in order before you sign your order ticket for a fund or reservation agreement with a real estate company. Trust me, most of these companies have your needs at the bottom of their priority list.


See you next week!