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What Should You Expect From Your Financial Advisor? By Rajesh Jyotishi, CEP, CSA

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August 2004
What Should You Expect From Your Financial Advisor? By Rajesh Jyotishi, CEP, CSA

By: Rajesh Jotishi

Over the last few years, many people have been disheartened with their financial planners/advisors. Because we had gone thru some bad years in the stock market, some people feel their advisor's could have or should have done a better job in managing their money. When things were good, many people took some very excessive risks. Some people may have bought specific products for some specific tax benefits or took excessive risks in the stock market for the fast buck. Nonetheless, in many of these situations, the end results were not desirable.

I am sure there may have been some negligence on both sides. Our intention is not to put blame on anyone, but to learn from our mistakes. Whether your financial advisor is your CPA, insurance agent, Attorney or Financial Planner, I think it is fair that you should expect some basic things from your advisors. Some of which include:

* He/she should be Knowledgeable in his field of expertise.

* He/she should be knowledgeable in the products he represents.

* He/she should make product recommendations that are suitable for you.

* He/she should explain all of the risks associated with a product/service to you.

* He/she should disclose any fees and expenses associated with a product/service.

* He/she should return your phone calls promptly.

* He/she should keep up with the changes related to his/her field.

* He/she should inform you of any significant changes that affect you.

* He/she should ask questions to understand your needs and risk tolerance.

* He/she should not take on more than he can handle.

* He/she should try to stay in touch with you.

* He/she should not try to be a master of all things.

However, I do think it is unreasonable if you believe that your financial advisor should be infallible, know about everything, only cater to your needs and work for the lowest fees/commissions. It has to be a win-win situation, or else it cannot work for the long haul. It is your responsibility to take part in your financial planning process.���It is not advisable to leave everything to one person and hope for the best.���You have to ask questions that are important to you and take decisions accordingly.���If you are not comfortable with the advice being received, get second opinions.

More often than not, people get hurt financially when they get too greedy by taking too much risk. The risk can be for a large tax benefit or for quick returns. Risk and reward do work together. Stay within your comfort zone. Sometimes it is better to pay taxes and have a smaller rate of return than to risk losing a significant portion of your money.

From a financial planner/advisor prospective, there are a few things we would like for you to understand.���We need you need to realize that there are some things we have very little control over, some of which are:

* We do not control the stock market.

* We do not control the tax laws.

* We do not control insurance companies.

* We do not control interest rates and the economy.

* We do not control rate increases from insurance companies.

* We do not control administration of various companies.

* We do not control the world economy.

* We do not control the political environment.

* We do not control terrorist activities and scandals.

* We also do not control you!

The best we can do is to provide advice based on our current knowledge and experience taking into consideration current tax laws, economic conditions, your needs and time horizons to recommend products/services that we feel might be right for you.���

It is our intention to help you manage the risks in your life and provide the planning and insight which will help you sail and navigate your finances as you go thru the various storms of life. We can help to provide the sail, but we cannot control the wind.

Many people have very rewarding life long relationships with their financial advisors.���A proper understanding of each others needs can make for a happy and prosperous journey.

Moneywise is hosted by Rajesh Jyotishi with Shalin Financial Services, Inc.

An Investment Advisor Representative of FSC Securities corporation. A Registered Broker Dealer. Member of NASD/SIPC. For questions he can be reached at 770-451-1932, ext. 101


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