In the last few years there has been more talk about Financial Planners than ever. It seems that they’re everywhere. They ‘ll solicit you by phone, e-mail, or even through your friends and family. My wife and I were set up to meet a FPC (Financial Planning Consultant) through a co-worker of mine. He came to our house and wanted us to tell him everything about our finances (we knew this days ahead, so we had it ready). The preliminary evaluation was basically in regards to our income and expenses.
After that part was completed he stated that he could have us debt-free within 5 years (that included our mortgage too).
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It just happened that he was able to find a way where we could invest a small percentage of money each week toward our retirement. He put together a portfolio for us at no charge and presented us with an investment plan with a fee of 1.25% per year. He laid out the ground work for us and gave us some material to read over.
At this point of my life I was already looking into getting involved with the stock market. I had a basic knowledge of it, but it wasn’t much. Matter of fact this incident was the final one that made me really learn what the market is all about and make a positive change for my future.
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As I went over the material that he left us. There was a lot of papers that covered everything. There were forms, graph, statistics and much more. While I went over it I noticed that there was a lot of fine print and since I don’t sign anything without reading every word on the document, I went through it. It seems that the 1.25% fee is just his commission. There were many hidden costs involved in being in this plan, including transaction fees,trading fee and withdrawal fees. As it turned out, this financial planner was only looking to finance his own portfolio.
When you look into any professional help, you need to do your research on the company as well as the individual. Take your time and be wise.
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