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Steve Braun
Financial Adviser
734-844-8770
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It's your
money. The more you keep, the better off you'll be.
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What to Ask Before Investing
(Click
here to
download a copy of this article to save or print.)
I
enjoy reading The Wall Street Journal and have always
found it to be a great resource. I am most impressed with
their commitment to honest journalism on relevant topics.
The October 4, 2004 edition included an article that
every investor should read. It was titled, “What to Ask
Before Investing.” Below are the key questions, according
to The Wall Street Journal, that every investor
should ask before investing in any mutual fund.
Questions You Need to Ask
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If I buy fund shares through an adviser, how is that person
paid? |
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How much will I actually pay for my adviser’s service? |
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If the fund has multiple share classes, which is the best
share class for me? |
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If a fund has multiple share classes, does my adviser have
a financial incentive to propose one class rather than
another? |
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Am I getting any commission discounts to which I am
entitled? |
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Does my adviser have a financial incentive to recommend
this fund rather than others? |
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Turning to my adviser’s firm, does it have financial
incentives to promote this fund rather than another? |
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What revenue-sharing payments does my adviser’s firm
receive from companies involved with this fund, if any,
and what does the fund company get in exchange? |
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Looking more broadly at the total costs of owning this
fund, are the annual charges reasonable compared with
peers? |
The Heart of the Matter
Good luck wrangling with your adviser to get answers to
these questions! Notice the entire focus of these questions
is the adviser’s compensation. This is a huge issue that
many investors overlook, much to their detriment. As I have
amply described in other articles, conflicts of interest
abound whether your adviser is paid on the commission-based
system or the asset-management system. You must be very
careful. Of course, you can eliminate these issues
completely by working with an adviser who is only
compensated on an hourly basis. No selling. No pressure. No
hidden agenda. Doesn’t that sound more like the kind of
trusting relationship you deserve from your financial
adviser anyway?
How Can You Avoid These Conflicts?
At
Liberty Financial Planning, we believe that compensation
based on an hourly rate for services rendered is more
sensible for clients because it eliminates conflicts of
interest. We work hard to provide you with objective advice
that’s best for you.
Give Liberty Financial Planning a call today for a free
initial consultation to see how we can help you.
We
appreciate your business!
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