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Show TIPS FOR CONSUMERS I I from your Better Business Bureau I Financial Planners If you lack confidence in your ability to plan your budget and make your own investments, you may be thinking of hiring a financial planner. While most financial planners are legitimate and can provide useful guidance, some unscrupulous self-proclaimed self-proclaimed planners have cheated consumers out of tens of millions of dollars annually. Basically, there are three types of financial planners and they are categorized cate-gorized by the maimer in which they charge their clients. Fee-only planners plan-ners charge either an annual fee based on assets and investment activity or an hourly fee ranging from $50 to $200 or more. Commission planners charge no fee but receive a commission commis-sion on the investment products they sell, such as mutual funds, insurance policies, or tax shelter investments. Feecommission planners charge a fee for your financial plan and a commission for the sale of investment invest-ment products. Because virtually anyone can call himse If or herself a f nanci al planner, regardless of his or her qualifications, experience, or education, consumers should use care in selecting a planner. Start by contacting several of the organizations that accredit financial planners, or ask friends, relatives, or colleagues who have had investment successes for reconunendau'ons. The planner should have a strong background of financial planning experience in such fields as insurance, accounting, or law. He, or she should be willing to provide references from recent clients, and show you examples ex-amples of plans and monitoring reports. re-ports. Also, check out prospective planners with your Better Business Bureau and contact your state securities securi-ties agency to see if he or she has a record of disciplinary action. Avoid planners who give you few or no alternatives in your investment plan. This may signal that the "planner" "plan-ner" is selling a specific product, or trying to steer you into a fraudulent scheme. Also, be wary of a planner whose address is a post office box or whose "staff" is merely an answering machine. The Council of Better Business Bureaus has published a booklet, Tips on Financial Planners." For a copy, send $1 and a self-addressed, stamped, business size envelope to CBBB, Dept. 023, Washington, DC 20042-0023. |