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Author: telegraph Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76235  
Subject: Re: My Meeting with the AmEx guy Date: 2/27/2004 11:25 AM
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a good financial planner is worth having for ***MOST*** folks who have no idea of asset allocation and diversification....and who have no financial markets savvy...

Unfortunately, most of the folks encounter someone who is really a salesman, who offers 'free financial planning' as an inducement to then buy high commission, high fee products.

While some might argue that ****MOST**** people need to have someone to tell them how to invest since those folks don't know enough to do it on their own, and one could make a case for that, others might suggest that most folks should take the time and interest to shop around, compare, and then make their OWN buy decisions.

Yes, for some, being 'forced' to save is something they need to do. HOwever, they should get their financial savvy from 'unbiased' sources, and just about anyone they encounter is very biased.....

But that is like having a salesmen decide 'how much car you should buy' based upon your income and 'needs'. You know the answer!...all the finance company will be willing to finance...the most option loaded highest price vehicle, with 'undercoating and paint sealant and fabric protectant and extended warranty' all sold at or near 'list price'......

We have a local pitchman on the radio...comes on twice a day with 'market reports'...in exchange, the radio station let's him pitch his 'financial seminars' where he offers you a 'free dinner' if you have "IRA or 401K" money to rollover....... you know without a second glance he is willing to give you 'free' financial planning advice, and suggest strongly you invest in his high commision high fee products, including variable annuity/life insurance/mutual funds......

About the time I retired, I went to several seminars that were similar, by competiting organizations...the Merrill Lynch guy spent an hour going over my portfolio and making 'recommendations'...into moderate fee investments, but with a yearly 1% 'fee' on the account, plus stock purchase commissions and purchase loads getting into the funds.....

The DEan Witter guy did an 'analysis', with similar offering...but higher cost/worst performing funds.....

I elected to follow neither....and I"m glad I didn't because I"m 50% ahead of where I would have been by following their advice and paying their fees in just 5 years.

Then my friend talked me into taking the Prudential course to become a 'financial planner'.....the first 'course' you take is 'life insurance' to pass the Texas state test to sell life insurance (fairly rigorous test!).....which I passed.....they had five or six tests and courses to prepare you to sell increasing levels of products.....after I passed the test, I really decided I didn't want to 'foist' their products on my friends and associates. The only money these financial planners made was on commissions..... so naturally they had to pitch and pitch, and try and sell lots of insurance (lots of commissions) and variable annuities and funds......

By the way, my friend ran out of 'contacts' after 2 years of doing that, and went back to 'retirement'.......

t.
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