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Author: jrhansen Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75530  
Subject: Friend for a Financial Planner Cont. Date: 8/28/2000 11:28 AM
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Thanks to all who posted replies to my question. Some responses to the points you raised:

JDWinNOLA wrote:
I would think that I would not want a "Good Friend" to know my personal finances that closely . . . I don't think you can remain friends with this advisor if you use him.

. . . more friends have been lost over money than anything else, including girl friends. ;-)


Josh responds:
I see your point. That very thing occurred to me during our initial meeting as more of my financial situation was revealed. I don't know, I guess I can see both sides of it.

The question is not whether or not I will remain friends with him, the question is will I use him as an advisor.

As for your last point, I've personally never lost a friend over money (can't say the same for girls). =)

TTRoberts wrote:
Hmmmmmm??? . . . . "including girl friends", huh? How about including wives and husbands? Therefore one shouldn't disclose "personal" finances to a spouse, huh? Why or why not? Is it easier to trust a friend or a stranger with one's personal finances . . . ???

I feel it depends on just how good that friendship is AND how good a "friend" one can be. AND . . . .just because one may use a "friend" of personal issues, like finances, doesn't me one should just take things for granted.


Josh responds:
I think you may have misunderstood JDWinNOLA's point about girlfriends. I understood him to be saying that more friendships have been lost over money than girlfriends, not that you shouldn't disclose your finances to your girlfriend or spouse.

You make a good point about all of the variables involved (i.e. how good a friend one can be, etc.). That's a fundamental difficulty in going to the boards for input. There's no way I can convey all of the relevant details to people who don't know either party involved (me or my friend).

I certainly, as you suggested, would not take any finances invested through my friend for granted. To the contrary, I think I would watch those investments even closer than my self-directed accounts.

jkrou wrote:
I would not entrust my funds to a friend. A substantial loss could occur that would wipe you out and you would lose your friendship, even if it was not his fault. Remember that he has NO control over the market and while he is responsible for managing the assets he is not REALLY responsible for your money making YOU money,, it is only a hope that this will occur.

I would hope that you would explain to your friend that you do not want cash to come between a great friendship because they are hard to find.


Aye, there's the rub. I am confident that my friend would never knowingly recommend a poor investment, but as you say he has no control over the market. I don't foresee being "wiped out" by a poor decision made at the recommendation of my friend as I wouldn't put all my eggs in his basket, so to speak. I would still maintain my self-directed account as well as an account with another firm (more of a stranger managing my account there).

BGPenhollo wrote:
I have only briefly looked at the AMEX funds and they are usually some of the worst funds available. AMEX FP's tend to recommend their funds which are load funds. I would think twice about dealing with an AMEX FP unless I was willing and understood that any money I invested with him was to help a friend - not expecting much in return other than knowing I was helping a friend.

As far as I know AMEX funds usually fall in the bottom quartile of returns. Go to Money.COM or SMARTMoney.COM and see how the AMEX funds rank.


We haven't gotten to discussing specific investments at this point, so I have no idea what he might recommend. Can you substantiate your sweeping generalization that "AMEX FP's tend to recommend their funds . . ."? I would think one would have to have considerable experience with AMEX FP's in order to make such a statement with any credibility. At any rate, I will keep your tip on AMEX funds in mind if and when we get to the point of choosing specific investments.

Your point about investing to help my friend is well taken. I think the two principles at odds within me are those of helping my friend and self-preservation. I want to help my friend and I want to be a good steward of my finances. I trust him personally, but I'm naturally a bit wary of the organization that employs him (full-service financial institution). It's a bit of a dilema.

Thanks again to all of you for your input. My take away at this point is that no one has come forward with resounding "Yes, do business with your friend!" In fact, no one even came forward with a feeble "yes."

I have been thinking about agreeing to a "trial" period, basically laying it out with him and saying, "Let's give this a try over the duration of this first plan. I'll put $X under your management and when it's time to re-evaluate the plan, either of us can opt out no questions asked. We can part ways as planner/client and go on again as strictly friends."

The more I think and write about this, the more the whole drama unfolds as a prospective dating relationship. My friend's asked me out and I'm not sure I want to lead him on. I mean, I really like him as a friend and I don't know if I want to risk our friendship by taking it to the next level. Oh the humanity. =)

Josh out.
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