Welcome to our first session of eight meetings called “It’s Your Money.” The name came about because many people relinquish their responsibility to people when it comes to their money. This could be the spouse, children, neighbor, broker or the advisor. We believe the longer you stay in control of your money either through a fee only advisor (owes a fiduciary duty to you) or through your personal efforts the longer and happier you will live!
Our mission is stated on our workshop schedule as well as our rules for the series. WE ARE NOT LIKE 95% OF THOSE OTHER “Free Lunch or Dinner” FINANCIAL PROGRAMS – we do not sell insurance or financial products. Our only bias is that we think folks should consider charitable organizations in their financial plans because our tax system encourages us to do so and giving tells the world about our personal values and interests. We especially encourage giving through your estate plan. Consider a Charitable Remainder Trust or Charitable Gift Annuity when selling a highly appreciated asset and definitely make a charitable organization a beneficiary on your IRA, 401K or 457 plan – it is very tax wise!
We use the quiz as an introduction to the financial world and have included the answers below.
The concepts we want you to understand are as follows:
- The financial world is a sales world. It is very similar to real estate although the sales folks in the financial world don’t call themselves “agents” (there is no law as to what you call yourself; wealth advisor, financial planner or consultant, etc.) According to the regulators, they are Registered Representatives of the company they work for. Since they are employees of their broker/dealer (Morgan Stanley, Merrill Lynch, LPL, Ameriprise, etc.) they have a greater duty to the company than to the client (A duty not to sell an unsuitable product to the client.)
- Most individuals do not know much about their advisor
- Most of us are not rational when it comes to money
- Investing a dollar does not come first – only after we have reviewed our goals and objectives, time horizon, risk tolerance, tax bracket, asset allocation, diversification strategy and cash flow needs should we invest a dollar.
- The Securities and Exchange Commission oversees all investments in the USA and operates on the premise that if everything is fully disclosed about an investment that a reasonable person can make up their own mind.
- The first thing you should ask a professional who wants to give you advice is – “HOW ARE YOU PAID?”
QUIZ AND FORMS:
HOW BROKERS, FINANCIAL ADVISORS, FINANCIAL INSTITUTIONS ARE PAID & CHARGE FEES; THE MOST IMPORTANT FACT YOU NEED TO UNDERSTAND.
FINRA Panel Orders Wedbush, Former Broker to Pay Investor $2.9M – Unsuitable Investment Lack of Supervision