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Tips for selecting a financial planner

June 16, 2009 12:00:00 AM PDT
During tough economic times, many people turn to financial planners for help. Here's how to find an advisor that will save your money.It's no secret that when the stock market dropped off a cliff, many Americans lost a good portion of their savings.

In these tough times investors often turn to help from a financial advisor to keep their savings from disappearing altogether. Bill Kornhauser of Torrance is one of them.

Within days of losing his wife of more than 30 years, his 85-year-old mother had a brain aneurysm and was in a coma. So Kornhauser needed to invest his mother's money to help pay for her professional care.

"It was a difficult time in my life, losing two of the most important people in my life, I didn't know what to do, and I trusted the bank and their two agents to help me with these funds," said Kornhauser. "

But the financial advisors that Kornhauser had trusted at the bank put the money in risky investments, and before long the Kornhauser portfolio had dropped more than $100,000.

"They're playing with a loaded gun and they're destroying your finances," said Kornhauser. "Basically, I lost a lot of money."

Brian Gilder, a certified financial planner, is now helping Kornhauser with his investments. Unfortunately, he says, some money managers are more salesperson than planner.

"There's unfortunately no morals left in financial planning, I think," said Gilder. "I hate to tell you it's the truth, because there are either financial salespeople, or financial advisers. And unfortunately, the good financial advisers are being lumped in with these financial salespeople, I call them."

But Gilder says investors can find good advice if they do a little homework before they hire anyone to look over their money.

  • Start by checking the adviser's background and education.
  • Meet the adviser face to face.
  • Walk out if there is any pressure by the adviser.
  • Make sure they give you reasons for their recommendations.
  • The adviser should ask to see your tax return.

"The tax return tells you 90 to 95 percent of the client," said Gilder. "Charitable contributions. Do they have a mortgage? Do they pay property taxes? You know their interests, you know their dividends, you know if they have tax-free bonds or not. You know if they're getting Social Security."

So do your homework. Kornhauser's story is your reason why.

"I lost a lot of money," said Kornhauser.

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