Always consider whether a planner's compensation requirements will interfere with his objectivity. Is he selling you a product because it's a good product for you or because he gets a larger commission on it? Some commission-based advisers associated with institutions such as brokerage firms or banks might have a quota they need to fill in order to keep their jobs, and the products they're pushing might not be the best for you.
If your adviser, broker or planner gets paid a commission, it does not necessarily mean that he or she isn't looking out for your best interests. But the potential for a conflict of interest is greater. With that in mind, don't be afraid to ask how much the planner is making off a product sale.
Lastly, don't forget about personality. Just as equally qualified doctors can have different bedside manners, so can financial advisers. Make sure that you feel comfortable with the way an adviser explains things to you. After all, it's your money.
Learn the latest trends that will help grow your portfolio, plus tips on investing strategies. Delivered weekly.
Dear Dr. Don, At age 24, I recently started a job working for a corporation. I'm interested in individual retirement accounts. I'd like to look at investing in stocks and bonds and learn more about choosing a 401(k) plan.... Read more
McDonald's returns have floundered in 2014. Are consumer tastes changing or is this a mere blip on the radar for the legendary fast food chain?
... Read more