jbd@pyuxjj.UUCP (J B Davis) (10/25/85)
We were recently contacted by a representative of Ford Associates in Florham Park, NJ. Apparently this firm handles 'financial planning' for people - i.e., they offer to review all of your finances (salary, savings, taxes, investments, assets, etc.), help set up budgets, and propose different investment 'vehicles' to reach your financial goals through a long-range plan. There is no 'fee' charged for their services. However,their only stipulations are that, if you go along with them on a review, you have to agree to 1) go through them for investing in the 'vehicles' they suggest IF you do decide to make those investments and 2) give them the names of five other people/couples who might be interested in the type of service that they offer. Altough it initially doesn't sound too bad, I am a bit concerned about certain aspects: a) The five names need to be given to the agent at the beginning of the financial review process rather than after, so you can't really be sure that they really deliver a quality product. It might be hard to face those five friends after! b) Not having to pay anything sounds kind of nice, but this is possible only because the agents get their commissions from the institutions/? marketing the investment products. I worry that this would compromise the agents position so that he/she wouldn't really be representing MY interests but would rather be in the position of trying to push some of these 'vehicles' to get good commissions. If anyone has had any experience good or bad with Ford Associates or any similar firm, please reply to me by mail. (Post to the net only if this seems it would be of general interest.) Thanks. Jeff Davis Bell Communications Research 50 Cragwood Road, SPL 1A-258 South Plainfield, NJ 07080 (201)561-7100 x2002 pyuxjj!jbd
eder@ssc-vax.UUCP (Dani Eder) (10/30/85)
> We were recently contacted by a representative of Ford Associates in > Florham Park, NJ. Apparently this firm handles 'financial planning' > for people - i.e., they offer to review all of your finances (salary, > savings, taxes, investments, assets, etc.), help set up budgets, and > propose different investment 'vehicles' to reach your financial goals > through a long-range plan. There is no 'fee' charged for their services. > However,their only stipulations are that, if you go along with them > on a review, you have to agree to 1) go through them for investing in > the 'vehicles' they suggest IF you do decide to make those investments > and 2) give them the names of five other people/couples who might be > interested in the type of service that they offer. Altough it initially > doesn't sound too bad, I am a bit concerned about certain aspects: > Most investment advisors today are really salesmen in disguise, whether it be for insurance, stocks, limited partnerships, mutual funds, etc. In order to protect your interests you should ask the following types of questions and get satisfactory answers: Does your firm have any connection with the investments you offer beyond being sales agents? What percentage of my investment would be consumed by commissions and other sales costs? If I invest today, will I have the option of changing my mind for the next three days? (Direct sales in the home are required to have this option by the Federal Trade Commission) Are you or anyone in your company (a)registered with the Securities and Exchange Comission as an investment advisor (b) a Certified Financial Planner (CFP) (c) a Chartered Financial Analyst (CFA)? If you are concerned about the advisor being partial to whatever he is selling, then you can look for someone who represents a full service financial house. Examples are Sears (insurance+real estate+ securities) and Prudential-Bache (insurance+securities). If you want even more impartiality, look for someone who does a financial plan on a set fee or by the hour, like an accountant. A mark of experience comparable to a CPA for accounting, is the CFP or CFA, which both require a series of examinations and three years experience. Another type of advisor is the 'money manager', who will take your money and invest it for you, taking care of all the details, and is paid on some combination of amount you have to invest and the manager's performance. For people in average circumstances (don't own a business or income property), producing a financial plan is quite straightforward, there is even software you can get to help you do it yourself. The knowledge a planner uses is (a) what alternative investments are appropriate for an individual's circumstances and temperament and (b) formulae and algorithms to determine the best proportions among the investment choices. I am studying to become an investment advisor, and would be glad to offer you advice based on my knowledge, at no charge. It would be good practice for me. Dani Eder / Boeing / ssc-vax!eder