More and more people are using their online banks to pay bills and transfer money between accounts these days and I can only image that as time goes on, more and more people will begin to do so as well. I was talking to a friend of mine that is a computer programmer. Somehow we got onto the topic of online banking. He said that neither he, nor any of his colleagues use online banking. This struck me as odd because he is in his late 30’s and I would guess a prime user for this technology. How Safe Is Online Banking? As we talked some more, he told me the reason why he doesn’t bank online. He told me that he could easily break into a bank online and take cash. In fact, it is relatively easy to do. The only thing that is stopping him is … [Read more...]
What is Fiduciary Standard?
One of the most important yet most overlooked qualities you should look for in a financial advisor is whether or not they are a fiduciary. What is a fiduciary or the fiduciary standard? What Is Fiduciary Standard? In the simplest form, a fiduciary is required to put your needs in front of his own. This may come as a shock to many, but there are a great number of financial advisors that are not fiduciaries, meaning they are under no obligation to place your needs in front of their own. Many of the larger financial advisor firms have what is known as the suitability standard. While the advisor does not need to place your needs ahead of his, he is required to place you in investments that are suitable for you. Make certain you … [Read more...]
How Financial Advisors Get Paid
I previously wrote about What to Look For in a Financial Advisor. In that post I briefly talked about how the advisor gets paid. I want to expand on that topic today. Overall, there are three main ways an advisor is compensated. Commission-Based Fee-Based Fee-Only Commission-Based When an advisor gets paid by commission, they are getting paid by placing you into specific investments. Most times, the firm the advisor works for has a deal in place with a fund company to earn a commission. The advisor could also earn a commission in the trades they place. While there are many great advisors out there that are commission based, I have a hard time trusting them. My reasoning is because you are entrusting them with investing your … [Read more...]
7 Reasons To Fire Your Financial Advisor
Your intent was to hire a financial professional to help you meet your life goals, whether they are saving for retirement or your child’s college education or for buying a vacation home. Whatever the case, the plan was for this person to assist you in meeting your goals. Unfortunately, there are some financial advisors who are looking out for their own well-being more than yours. If you have a financial advisor, I suggest you read the below list of seven examples of your advisor not putting you first. If yours is committing any of these “crimes”, you may want to begin looking at other advisors for help. Reasons To Fire Your Financial Advisor Focus More On Performance Than Your Goals If your advisor is only focused on performance as … [Read more...]
Changing Financial Priorities: Containment, Recovery and Investing
Lately I have been thinking about, and questioning, the way in which we set our priorities. Listening to my friends, it struck me that we think about priorities as more stable and persistent than these ought to be if we really move through life. This got me thinking about the way in which my financial health priorities are changing. I also realised that without recognising the changeable nature of our priorities. we can really ‘get ourselves in a rut’ – keeping rigidly to the priorities we have today, prevents us from thinking about the ones we could set tomorrow; this in turn overshadows our ability to learn and act for tomorrow. This is probably best illustrated by an example, and risking for this to become a habit, the example is from … [Read more...]
