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Money Matters: Sudden wealth advice

Topic closed. 80 replies. Last post 7 years ago by Dollar419.

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United States
Member #63273
July 24, 2008
24 Posts
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Posted: April 20, 2010, 10:59 am - IP Logged

Here are 10 questions the CFP board suggests you ask your prospective planner before you sign on the dotted line:

 

  1. How much experience do you have? 
  2. What are your qualifications? 
  3. What services do you offer? Do you sell stocks, mutual funds and other financial products? Do you sell life insurance? Financial planners are generally barred from selling insurance or securities without the proper licenses and cannot give clients investment advice unless they are registered with state or federal authorities.
  4. What is your approach to financial planning? Will you make recommendations and then bring in other professionals to execute them or will you help me buy the stocks, bonds and life  insurance  policies I need? Make sure the planner’s investment approach matches your own financial goals and objectives and is not too cautious or overly aggressive.
  5. Will you be the only person working with me? Do you have other people in the office that will assist you? If your planner works with attorneys, accountants or life insurance agents to implement his plans, be sure to get a list of names and check their backgrounds.
  6. How will I pay for your services? Some planners charge an hourly fee or monthly retainer. Other planners charge a fee equivalent to a percentage of the client’s assets they have under management. Others charge you nothing but earn a commission from sales of life insurance,mutual funds  and other products.
  7. How much do you typically charge? Can you give me an estimate of how much my costs will be? These costs should include the planner’s hourly rates, asset management fees and any commissions he is likely to receive from the products that he sells you. 
  8. Could anyone besides me benefit from your recommendations?If your planner receives commissions from product sales or referral fees from other companies or professionals who send him business, make sure that he fully discloses these potential conflicts of interest.
  9. Have you ever been disciplined for any unlawful or unethical actions in your professional career? What government agencies and/or professional regulatory bodies (the  Securities  and  Exchange Commission, FINRA, the CFP Board, etc.) are you governed by? Contact these organizations to conduct a thorough background check.
  10. Can I have it in writing? Ask the planner to provide you with a written agreement detailing the services to be provided. Keep it in your files for future reference.

Most importantly, “Sit down and talk with your financial planner before you start to do business,” Blayney says. “I am still stunned at the number of [Bernie] Madoff clients who never, in fact, met the guy.”

 

from here... http://www.entrepreneur.com/money/article201860.html

Good info here. Although my first question asked to any advisor would be #9.Cool

If I won big, I know what investment strategy I'd take..very low risk, tax-adverse. I would dictate to the financial planner the general direction I want money infested in and he/she can take it from there with the specifics.

Very small, steady gains, not dependent on the whims of the market, preservation of principal all important.

    rundown99's avatar - cigar

    United States
    Member #567
    August 14, 2002
    484 Posts
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    Posted: April 20, 2010, 11:24 am - IP Logged

    Play the lottery in a state where you can be anonymous.  If you win the jackpot, hire a financial advisory team.  Make sure they don't tell anyone.  Don't tell anyone (family, friends, etc.).  Set up a will.  Move to a different location.  It's as simple as that.

    Smart lottery winners form trust to claim their winnings.  They send an attorney to the lottery headquarters to claim the prize in trust, so that ONLY the name of the trust is revealed.  And they tell NO ONE, especially relatives.

    If you ever win a lottery and you are single, the only person you should ever marry is someone who was truly in love with you BEFORE you won the jackpot!

      Lucky Loser's avatar - bucks
      Texas
      United States
      Member #86154
      January 30, 2010
      1649 Posts
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      Posted: April 20, 2010, 11:42 am - IP Logged

      Play the lottery in a state where you can be anonymous.  If you win the jackpot, hire a financial advisory team.  Make sure they don't tell anyone.  Don't tell anyone (family, friends, etc.).  Set up a will.  Move to a different location.  It's as simple as that.

       And they tell NO ONE, especially relatives

       

      As much as I hate to say it, this part of your signature is so very true. It's the relatives becoming so elated with everything that will draw all the undue attention to a person. I love all my relatives and this is why I wouldn't say a word but, rather help them in the least suspicious way possible.

      Mom and dad would need to know since they're seasoned with keeping things quiet but, that's about it. If I had to, I'd say that I found a very good private investor that knows how to really work my money...or something. As long as they feel you're working for it in some way, it won't be bad at all.

      But, if word get's to Festus that you're "RICHER THAN A CHOCOLATE COVERED SUGAR CANE", then it's all over and your troubles begin. This is real.

       

      L.L.

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        Milwaukee, WI
        United States
        Member #3131
        December 27, 2003
        665 Posts
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        Posted: April 21, 2010, 10:58 pm - IP Logged

        If I end up with $70 million cash, I won't go to a financial planner..

        I will have a staff of financial planners. They will work for ME, they may be allowed to take side jobs, but they will work for ME first.

        Probably just need a full time accountant, who can consult with somebody else....

        And always use the KISS system, If I don't understand it, we won't do it.

        MarkP

          Avatar
          Milwaukee, WI
          United States
          Member #3131
          December 27, 2003
          665 Posts
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          Posted: April 21, 2010, 11:10 pm - IP Logged

          Well, as I only won $1 tonight, I don't have to worry about sudden wealth....

          MarkP

            Dollar419's avatar - Lottery-050.jpg
            Santa Ana
            United States
            Member #71159
            February 20, 2009
            651 Posts
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            Posted: April 21, 2010, 11:37 pm - IP Logged

            This is from an article in a local business journal. Nothing surpriszing, but some good advice. The article is about people coming ointo windfalls, and in the beginning of it he specifically mentione lottery winners.

            Get financial guidance from a qualified source.

            You would think that anyone who receives a six-figure or seven-figure check would immediately talk to a financial professional. But that is not always the case.

            Some people put it opn their "to-do list" and then go out and do otgher things with the money. Some never bother to seek qualified advice at all. Instead, they listen to relatives or neighbors.

            The problem is, sometimes these relatives or neighbors:

            • Have never had great amounts of money and do not understand the responsibilities that come with it
            • Only see wealth in terms of material things or purchases
            • Would like to vicariously live out their fantasies as a by product of your good fortune
            • Urge you to take chances (risks) with your money
            • Assume that yopu are "set or life"Want you to look at wealth from their mentality, or want you to associate with their shady lifestyle.

            While your relayives and neighbors may mean well, they are likely not financial advisers. In fact, some advisers aren't well equipped to consult with people with sudden weslth either.

            Scott McClatchey

            Southern Business Journal

            ________________________________________________

            I remember reading about a jackpot winner who talked about her sister-in-law saying, "Now that we've won". His comments above about relatives and neighbors certainly smacks of that.

            Thank you for posting this sound advice--GOOD LUCKHyper