Home Economics

Friday, November 28, 2008

Posted by Peter M

One would have to be in hibernation or living under a rock to not be aware of the current urgency in the affairs of the global economy.

It's a time of great uncertainty with people unsure of their jobs, future plans put on hold, retirement and education funds on hold, rising food costs and a shrinking nest egg.

Sounds dim, huh?

Most of you know me as "Kalofagas" but my "regular" job as a financial advisor also puts me in contact with alot of people, their dreams and their concerns about the future.

These aren't the best of times economically but it's a good time to take stock of your own personal affairs and that of your family's.

The first thing you should do is ask if you have a true financial advisor? A financial advisor will ask you about your short and long-term goals, reduce your tax exposure, study your insurance needs, see if your current portfolio matches your short and long-term goals, study your estate and insurance needs, help you with your budget and ultimately help create a portfolio that will match your goals.

If your current "advisor" does not touch upon most of the above aspects of your affairs, perhaps it's time for you to seek a new advisor.

The best way to find an advisor you like and you trust is to seek a referral. We ask friends and relatives to refer a mechanic, a dentist or babysitter...why not ask them who their advisor is? Are they happy? Does the advisor stay in contact with them? Do they see you at least yearly? Do they educate you? Are you comfortable with them?

Once you've found 2 or 3 prospective advisors, it's important to ask how they are compensated. This is very important as you will find out if their primary motivation is to make money or make money for you. The latter is always the most sought-after.

Find out what your advisor's credentials are and seek out information on the company they work for.

Finally, choose and advisor that's a best fit for you and your family. Choosing an advisor in your same life-cyle (age) helps, someone familiar with people in your career field and an advisor who best suits your needs.

Advisors come in all shapes, forms and levels of service. They are stock-brokers, insurance agents, bankers, certified finacial planners & advisors and there are good and bad ones for every category.

It's a good time to take a closer look at the relationship with your financial advisor and if you don't have one...now's a good time to start.

This post was Peter

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Peter this is a wise article. Especially at this time it is really important to take a closer look. A good financial advisor will take the initiative to propose innovative ideas based on the funds you have available or show you ways to get the most from your tax returns etc. What I liked about our fin. ad, was he took the first initiative and arranged to meet with us as soon as the market crisis issue started. Showed us that he was thinking ahead for us.

Thanks for this!

Meeta K. Wolff said...
November 28, 2008 at 10:47:00 AM GMT+1  

One of the main issues I have with most financial advisors is that they profit from selling you new contracts, be it insurance or other financial investments. So usually they will try to convince you it is better to cut the old stuff and head for something new. If you do so, remember to ask for part of their profit margin (usually a commission for bringing in new clients).

I agree that it is smart to have a closer look at ones finances every now and then, and to ask for ome expertise. But it was experts who put the financial market where it is now, it was bank experts who caused the crisis we are in, and you really need to be careful and wise choosing advisors.

Speaking of insurance, in Germany there are still two days left to change your car insurance policy for 2009, and usually youll get a discount even if you stay with your old insurance just by asking for a new tariff.

Anonymous said...
November 28, 2008 at 8:01:00 PM GMT+1  

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