Sunday, June 28, 2009

Why Advisors are NOT the same.

Look to build your team with experts in their own particular fields while most importantly surrounding yourself with people you feel most confident and comfortable with. Understand that it's hard to find people you can trust so interview many different professionals, even if they are referred to you by someone, check their references, ask them the questions you want to know, get their experience levels and the type of clients they work with, and make sure they are certified or registered.

* First, a lawyer. To handle probate, account title changes, any and all legal issues (NOT financial, tax or accounting issues).

* Second, a CPA. Depending on the amount of assets involved and your own personal expertise, I would consider a CPA from a large, long-established firm -- not a one-man shop. Purpose is to help with any tax and or accounting-related issues. Pulling together a summary of your assets, liabilities, new worth, etc.

* Third, a financial advisor. Before choosing a financial advisor, I would would ask quite a few people for their recommendations (the lawyer, the CPA, your bank, etc.). It's real important that you get someone who's reputable, who's good at what he/she does, and who's been in business for awhile.

Lawyers, CPA's and Financial Advisors are all experts in their own fields, although they often will claim expertise that covers the gamut. However, it's a mistake to assume that only one of these specialists can handle all your needs.

Finally, just a couple of added recommendations:

* Begin learning (classes, reading, etc.) about how to handle your own financial affairs (e.g., taxes, investments, budgeting, etc.). It's a BIG mistake to rely solely on a experts and not having any understanding of what they are recommending.

* NEVER, NEVER, NEVER take an expert's advice unless you understand what they are recommending and why. If necessary, get someone else to explain the advice in a way you understand.

* NEVER, NEVER, NEVER give your lawyer, your CPA or your financial advisor control (e.g., power of attorney) over any of your accounts. You should have to personally initiate and sign off on any transactions in your accounts.

* ALWAYS review your monthly statements (credit card, banking, investment) to make sure there are no transactions that have not been authorized by you.

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