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Draft Y our F inancial Dream Team

ask to see the commission (plus bonus) disclosed in writing. Many people are

stunned when they find out their planner frequently makes 80 percent to 85 per-
cent commission (with bonus) or more of money invested in the fi rst year.
I am not comfortable with recommending “traditional” fi nancial plan-
ning to the average person because I know in my heart that it does not work.
The planners available simply are not skilled in investing. They just regurgi-
tate the sales pitch, sell on commission, and move on to the next client.
A list of the top 10 questions a novice investor is supposed to ask before
working with a planner is just a sales pitch to get people to work with a planner

who has certification, versus one who doesn’t. It is not benevolent information
to help the masses; it is designed to sell agents into getting a certificate, and to

get people to go to those agents. To be blunt, if traditional fi nancial planning

even remotely worked, the financial education industry would barely exist.
So, who should use a planner and who shouldn’t? If you are new to
investing or less sophisticated and/or have an income that is at the middle-
class earning range, then I recommend that you do not use a planner. You can
buy the life insurance, mutual funds, and stocks you need online or over the
phone and avoid most/all commissions. Let’s be honest, you don’t have many
assets that need managing. Don’t waste your money on fees and commissions.
I am serious, there is no reason to pay commissions to someone who is not rich
from investing themselves at this level. See my Chapter 7 and also investment
authority Philip Springer’s Chapters 16 and 17 for more information on
picking good mutual funds and stocks.
But if your circumstances are different from the average person’s, con-
sider using a planner, but with these guidelines:

You have a reasonable amount of existing investment assets or capital,
and/or earn well above-average income, and are committed to investing
at least 10 percent of it. If your level of sophistication is low, then meet-
ing with a planner can make sense, but follow these rules:

• No new planners. No planners in the bottom 80 percent in sales.
Do not throw your money away.
• Ask to see their sales reports showing their rank in the offi ce (they

all have them). If the amounts of money are significant, ask to see
how much they have invested in the investments they are recom-
mending. Also ask to see a statement showing their investment
returns for the previous year. Many will balk at those requests, and,
if they do, then don’t work with them.

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