Skip to site content
The Show

Money-Guy, April 4, 2006 Podcast

Homework/Additional Reading
.  .

Financial Chaos Topic: Choosing a Financial Professional
The US Securities Exchange Commission (SEC) says the best advice it can give you about how to invest wisely is Ask Questions. The following is a list of questions which are helpful in choosing a financial professional:

SEC Questions:

* How long has your firm been in business?

* What training and experience do you have? How long have you been in the business?

* What is your investment philosophy?

* Describe your typical client. Can you provide me with some names and telephone numbers of your long term clients?

* How do you get paid? By commission? Amount of assets you manage? Another method?

* Do you make more if I buy this stock (or bond, or mutual fund) rather than another?

* Are you participating in a sales contest? Is this purchase really in my best interest, or are you trying to win a prize?

* If your financial professional changes firms, ask: Did they pay you to change firms? Do you get anything for bringing me along?

AARP Questions

* Will you provide a written statement of the total dollars in fees and commissions earned by you and your firm and any affiliated broker-dealer, insurance agency or other similar organization because of our relationship?* Do you accept fiduciary responsibility across all aspects of our relationship?

Note: Fiduciary means that the person working for you owes you the highest possible duty of care and loyalty, so that a relationship of trust and confidence exists between you and the planner. While you may think that this sort of trust and confidence will naturally exist, a fiduciary relationship usually depends on the facts and circumstances of a particular situation. Many brokers will not accept fiduciary responsibility because they may already have a fiduciary relationship with their brokerage firm that can conflict with their duty to you.

* To the extent that you will be giving me on-going investment advice, will you be providing me with a quarterly written report of my portfolio rate of return, along with benchmarks very similar to my portfolio, so that I can assess progress?
* Please provide two references from clients who have worked with you over the last five years.

NAPFA Questions

  • What are your financial planning credentials/designations and affiliations
  • How long have you been offering financial planning services?
  • Do you have clients who might be willing to speak with me about your services?
  • Have you ever been cited by a professional or regulatory governing body for disciplinary reasons?
  • Will you sign the Fiduciary Oath?
  • Do you have a minimum fee?
  • Do you receive referral fees?
  • Do you receive on-going income from any of the mutual finds that you recommended in the form of “12(b)1” fees, “trailing” commissions, or other continuing payouts?
  • Are there financial incentives for you to recommend certain financial products?

And to make sure your financial professional isn’t a crook, check them out at the following sites: Board of Standards

SEC-Protect Your Money

Enjoy the Show?


Where You Can Watch and Listen:

Subscribe on these platforms or wherever you listen to podcasts for new episodes every Friday, live streams every Tuesday at 10am CT, and new highlight clips throughout the week.

Related Content

Free Resources

Financial Order of Operations®: Maximize Your Army of Dollar Bills!

Here are the 9 steps you’ve been waiting for Building wealth is simple when you know what to do and…

View Resource

Wealth Multiplier By Age

How much to save every month to become a millionaire.

View Resource

Car Buying Checklist

Here’s how to buy a dependable car that won’t break the bank.

View Resource


Can This Annuity DESTROY Your Retirement?

, ,

Read More

The IRS Just Changed the Rules About 401(k)s (What You Need to Know)

, ,

Read More

Wealth Multiplier Revealed: The Magic of Compound Interest!

, ,

Read More

Financial FAQs

Courses & Tools

How about more sense and more money?

Check for blindspots and shift into the financial fast-lane. Join a community of like minded Financial Mutants as we accelerate our wealth building process and have fun while doing it.

Millionaire Mission (Brian’s Book)

Buy Now

Know Your Number Course

Buy Now

The Money Guy Net Worth Tool

Buy Now

Recent Episodes

It's like finding some change in the couch cushions.

Watch or listen every week to learn and apply financial strategies to grow your wealth and live your best life.

maxresdefault 2

Is It Okay to Retire with a Mortgage?

Watch Now
maxresdefault 1 1

How to Choose Between Competing Financial Priorities (Determining the Winner)

Watch Now

Budgeting vs. Cash Flow Management: What’s the Difference?

Watch Now