Have you heard of people working as financial planners? What about financial consultants? If these two terms know you, you know they are people working for investment companies. Investment companies usually earn their income by charging fees and interest when recommending a particular attack plan or investment product. By utilizing their expertise you do not have to work and do your own research. But how true is the advice of these investment companies? Is it solid and sound advice? Could they defraud you of your money and only win their self-interest?
The problem with investment companies is that they often have a conflict of interest. What is a conflict of interest? It happens when companies pay their sellers (financial planners, brokers, consultants, etc.) on commission. Therefore, employees will always push for higher sales and not serve the best interest of customers (maximizing profits for each customer).
You want to avoid financial people involved in broker-dealer networks. Usually, they come from the same source of financial expertise.
There are many types of investment in the market. There are bonds, stocks, money market, mutual funds, options and futures, annuities, limited partnerships and so on. Sellers often earn the largest percentage of commission from options and futures. How do you know a company works on commission? Look for the prospect and find a term called "load". If the word "load" is present, it means that some of your hard-earned money goes to the Commission instead of going directly to your investment.
Beware of salespeople who don't reveal much about the company's background, especially with terms like vice president or financial consultant. You have every right to be doubtful when you think the investment sounds vague or unclear to you. Never put pressure on the seller. You deserve to take all the time in the world to decide a particular type of investment.
You want to get unbiased reviews and opinions on an investment product. Often, the best in the market can be obtained for free load (no commission).
Stock brokers or financial consultants selling investment products must be professional and responsible. They are widely posted to provide good advice to clients who need it. But in reality, most are misusing their positions to instill unnecessary fear and develop tedious strategies to boost their own sales.
Personal finance is very important, but you may want to know more about something else, security cameras.
No comments:
Post a Comment