How to Choose a Financial Planner

Six vital questions to ask before doing business


Do you work with an independent custodian?
Whether your advisor is managing your money or you are the person who signs off on each financial decision, your advisor should not be holding your funds. Your money should be held by an independent custodian company. Make sure you know the name of the company; how to contact the company; and your account numbers.

Will I be able to review all transactions? The answer should be “yes”. When you receive your statements, be sure you look at all transactions. Make sure you understand each purchase, sale, deposit and withdrawal and why it was made. Like any relationship, your bond with your planner should be based on trust, honesty, and openness.

Dos and Don’ts of Choosing a Financial Planner

–Don’t jump into the relationship without doing your homework first

–Do find out what the planner’s experience and qualifications are

–Don’t assume that your friend’s financial planner will be the right one for you

–Do keep tabs on all transactions and other dealings related to your portfolio

–Don’t feel that you have to work with the first financial planner you interview

–Do seek out a new financial planner if your first choice isn’t working out

An expanded version of this article will appear in the December 2009 issue of Black Enterprise magazine.

Wealth For Life Principles

1. I Will Live Within My Means
2. I Will Maximize My Income Potential Through Education and Training
3. I Will Effectively Manage My Budget, Credit, Debt, and Tax Obligations
4. I Will Save At Least 10% of My Income
5. I Will Use Homeownership as a Foundation For Building Wealth
6. I Will Devise An Investment Plan For My Retirement Needs And Childrens’ Education
7. I Will Ensure That My Entire Family Adheres To Sensible Money Management Principles
8. I Will Support the Creation and Growth of Minority-Owned Businesses
9. I Will Guarantee My Wealth Is Passed On To Future Generations Through Proper Insurance And Estate Planning

10. I Will Strengthen My Community Through Philanthropy

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  • Carole Thompson

    Ms. McCrea,

    My name is Carole and I live in Indiana. I’m in a bet of a crisis right now in that the company I work for has a contract with the state and it is ending come December 31, 2009. I have placed applications and resumes with several other companies and nothing so far. My dilemma at this time is what should I do about my 401K. Need to transfer it or place in an IRA or something soon. I’d rather not have it sent to me and have to pay taxes on it. What should I do? I love some suggestions. Thank you.

    • vielka

      I am sorry that I am just reading this. I hope you did not cash in your 401K and that by now you have a job. You have some choices with the 401k you can leave it with the firm you were until you get a new job that offers you a 401k and you can transfer it then or you can transfer it to a IRA or Roth Ira.

      Good Luck

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