If you are receiving benefits from your employer, you have probably been presented with the opportunity to enroll in a 401k plan. A 401k is a beneficial resource for your retirement, as it automatically deducts funds from your income to help you save for your future.
As this video explains, many employers will match your contributions to your 401k as a means of employee retention. You can take advantage of this benefit throughout your working life and roll over your 401k into an IRA when you are ready to retire.
To better understand how to make the most of your 401k, visit PlanAndAct.com. We are a unique online financial planning company offering objective advice at an affordable cost all from the convenience of your computer.
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“If you fail to prepare, you prepare to fail” – there is no denying the wisdom of these oft-quoted words. Unfortunately, when it comes to financial planning, many of us fail to prepare and end up dealing with nasty surprises (a.k.a. financial nightmares). For those of us who do realize the need to plan, our idea of planning stops at consulting a financial planner.
There is a lot more due diligence required, however, to ensure you are consulting the right advisor. You don’t want to end up with a so-called “personal financial plan” that was churned out in seconds from a great selection of templates. What you need is objective, independent financial advice that puts the customer i.e., YOU first—your needs, goals and financial strengths and weaknesses.
The Top 5 things to consider when you seek an expert financial planner
1. Does the individual or consulting company follow a “fiduciary standard of care” or a “suitability standard of care”?
What does this really mean? In literal terms, “fiduciary” comes from the Latin word “fidere”, meaning “to trust”. When applied to financial planners it means that in an advisory capacity, the professional or organization offering advice only makes recommendations that are in the best interests of the client. So you receive the highest standard of care as recognized by the law. The trust you place in your financial advisor becomes a legal right. The advisor can be penalized or even prosecuted and imprisoned for offering advice that goes against your best interests. In case of investment losses, you stand a greater chance of being compensated. Compare that with a “suitability standard of care” where the financial advisor’s recommendations are influenced by commissions or "kick-backs" from the fund companies that they recommend. Which means, the recommendations you are given are definitely not a 100% in your best interests. Possibly, not even close!
2. Does your financial planner offer you a fee-only service or operate in “transaction mode”?
Depending on your net worth as well as income and liquidity levels, a financial advisory that profits from commissions on certain name brand or house brand financial products will push those out to you. This is certainly neither objective nor independent financial advice. You are dealing with incentive-driven sales people and brokers rather than real advisors who offer a fee-only service.
3. Will the financial planner speculate and try to “beat” the market with your money?
If yes, you are likely putting your hard-earned money at risk. The advisor may entice you with the excitement of active management investment but there are no guarantees about your savings for the future or the safety of your funds today. On the other hand, a passive investment approach is a tried and tested method to ensure your financial goals are defined. Your independent financial advisor will then offer you objective advice on tax planning, saving for retirement, wealth enhancement, risk management, estate planning, asset protection, and much more.
4. Does your financial planner have a solid, clean track record?
How do you know? She or he may be a smooth talker and sound really compelling. The best way to determine the credentials of the individual or the financial advisory firm is to ask for references. You could also run a background check to confirm the record is clean and that there are no compliance issues, instances of securities violation or criminal history problems in the past.
5. Is your financial advisor asking for custody of your account?
That should be an immediate red light for you! You have the choice of allowing a Limited Power of Attorney or a View/Read Only Power of Attorney. You remain the one in control of executing trades on your financial advisor’s recommendations.
Plan & Act is a fee-only financial planning service that offers independent money management. We are a team of experienced fiduciary advisors committed to providing objective financial advice. We maintain a fiduciary relationship with our clients and assume a legal duty to place your interests ahead of our own.
Take advantage of our online financial planning tool—for a low $199 only, you can get your own personalized financial plan. If you are not completely satisfied, your cost will be refunded in full.
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Financial planners are excellent resources for managing your money and preparing for the future, but their services may be more costly than the benefits you receive. This is in part due to the fact that many brokers and financial advisors are paid a commission for selling certain financial products. The fiduciary services of an independent Internet-based organization are a suitable alternative to traditional financial advisors because they can offer objective input on your current financial situation and suggest the best options for your individual needs. Here are some of the advantages to using an Internet financial service:
- Convenience: Viewing your portfolio and managing your investments online allows you to access you financial information no matter where you are. There is no need to schedule an appointment to speak with your advisor, as all the planning services take place over the web. Instead of feeling pressured into high-stakes decisions on the spot, you will be provided your options based on the your specific financial needs.
- Affordability: Online financial planning comes at a much lower cost than the fees of a personal advisor. Traditionally, advisors and brokers come at a price much higher than middle class Americans can afford, but the need for sound financial advice in a period of economic uncertainty has changed that and paved the way for alternative solutions.
- Safety and Privacy: Strict federal and state regulations apply to online financial planning in the same way they do to face-to-face planners. This means that all of your information is transferred securely and kept confidential throughout the entire process.
If you would like to see how easy it is to manage your money over the Internet, visit PlanAndAct.com and get started today. Our unique approach to financial advice can help you plan quickly and easily.
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