| Sargent & Lundy Savings Investment Plan |
| PREPARING FOR A FINANCIAL PLANNER |
| The following excerpts are from an article in the June
1999 issue of "Retire With Money". The opinions expressed by
the author, certified financial planner Michael Terry of Financial Asset
Management Corp., may or may not reflect those of the SIP Committee.
Here are eight strategies to make sure that your time (and money) are well spent: 1. Write down your financial goals and objectives before your first meeting with a planner. Be as specific as possible: Do you need advice on how to take your pension distribution? Do you want to reorganize your estate to reduce taxes? Or, are you concerned about management your money during retirement? No matter what your challenges may be, go to the meeting prepared to discuss them. 2. Be willing to open up. A good financial planner is a professional listener. Don't be afraid to share your dreams, your anxieties, your wants and your needs. And don't be put off by probing personal questions. Planners aren't judging you, they need lots of details about your needs and lifestyle to provide the most appropriate advice. 3. Bring all of your financial documents to the meeting. Try to have at least three years of tax forms, current brokerage or mutual fund statements retirement plan documents, life insurance policies, annuity contracts, bank statements and current Social Security statements. If you're looking for estate-planning advice, bring copies of your current will and any trusts that you may have already set up. Don't hold anything back. There's nothing worse than working out a plan and then remembering another $50,000 or so that you had squirreled away in a CD somewhere. 4. Know the basis for all your taxable investments. A good decision on repositioning your assets can't be made without assessing the tax consequences. If you're not sure about a tax issue, ask your planner to talk to your tax preparer. 5. Be honest about your risk tolerance. If you say that you're a very aggressive long-term investor who is looking for growth, the chances are good that your recommended portfolio will be heavy on equities. But if you can't sleep at night when the Dow goes down, then such a portfolio will not be a good fit. Better to explain all your worries and let the planner show you the trade-offs between risk and return. 6. Don't have an investment return figure locked into your mind. Even Warren Buffet can't deliver 25% per year with no risk. If you truly never want to touch your principal, don't expect returns higher than 6% or 7%. If a planner guarantees a ;specific rate of return, take your money and run. 7. Once the plan is delivered, ask lots of questions. Here are a few to start with: Why is a particular asset allocation model used? Why was a particular stock, bond, or fund chosen? How risky is the portfolio? What are the fees? What are the expense ratios of the suggested funds? Are there any early-withdrawal penalties or backend loads? Are the recommended funds tax efficient? If your planner refuses to answer your queries, find someone else who will provide better service. True, that may mean starting over, but what's the point of having a plan that you don't understand? 8. Establish a monitoring plan to watch over your investments. Don't let your plan sit on the shelf gathering dust instead of wealth. First outline steps to implement the plan and then develop a systematic review system for you and your adviser. |
This page updated on 6/1/99