8 Common Sense Questions To Ask A Potential Investment Counsel

"Ordinary riches can be stolen, real riches cannot. In your soul are infinitely precious things that cannot be taken from you." -- Oscar Wilde

Money is part facts and figures. A greater part is emotion. Few people are what I would call emotionally "neutral" about money. Image, status, self-worth and our very sense of survival gets tied to money. The global economic downturn has released our deepest anxieties, insecurities and fears, fuelled by media reporting.

What is the truth here? And more important, what is the opportunity?

If you feel dependent upon the things you own, the job you have, how you look to others to feel loved and accepted, you are sitting on the edge of a branch and can fall off any time. There is absolutely no security in the outer world of material possession and opinion of others.

For physical health and the wealth of well-being and happiness, you need to return to your core motivation: to your real value and values, accepting yourself as you are; appreciating your good intentions and caring; engaging in the life that has most meaning and purpose for you; using your natural talents, gifts and abilities - at any age.

Forgive the mistakes you have made - they are what make you human. Let go of the poor choices you made in the past. Let go of what you no longer need. What does today offer you that you can be part of and celebrate? Some small thing. A few of them. Call a friend. Smile at a stranger. Put on some great music and dance.

There are a few simple wisdoms for managing money. Earn more than you spend. Save a little of what you earn - it will grow for you. Give some to benefit others. Track what you earn and spend. It will help you to feel in charge of your life.

Have fun living with sufficient for your basic needs. Find joy in being frugal. Discover the power of your freedom to be true to yourself. Do not believe all you read in the papers, or hear on tv news. Believe in you. Trust in your innate goodness. You are the source of your capacity for greater health, wealth and happiness.

It may be that the financial institutions in which you have placed your confidence have betrayed your trust. You may have lost all hope that your money can ever be safe. The temptation is to put any spare cash under the mattress.

The magnitude of loss of hope will prolong the downturn. As I witness President Obama, I observe that he is looking to restore hope and confidence. I find hope in the goodness of ordinary people. There are many more of them than the "baddies" we read about.

The ability to do, the strength to do it, and the energy to complete it; that is the true wealth. Out of that come our health and our happiness. --John-Roger

I am fortunate in having an investment counsel who has skillfully and responsibly navigated through the stormy financial weather of the last 18 months. The portfolio they manage for me has kept its value. The following questions are those they might expect to be asked by a potential client.

1. How long have you been in business?

Even if it's a start-up firm, you want some sense that the investment counsel is experienced in managing money.

2. What educational qualifications do you have?

Older, more experienced counselors may not have a high level of formal education, in which case experience would be key. But younger counselors should have some formal education, such as the CFA designation, which stands for Chartered Financial Analyst. This is a rigorously controlled global standard for portfolio management.

3. What is your investment strategy and process?

Potential clients need some sense of how their money will be invested. Individual stocks and bonds? Pooled funds? Mutual funds? Exchange traded funds? The potential counselor should be able to adequately explain the differences and the rationale for using these investments.

4. How long have you used that strategy and how successful have you been for your clients?

Individual results will vary, but they should be able to show some sort of bench marked results, updated to the last quarter end.

As any employer, you can ask for references from existing clients and be able to speak to them about their experiences with the investment counsel.

5. How are your client's investments custodied?

Many people do not understand the concept of custody. The key is that their assets are held separately, and that they receive regular proof that their assets are individually custodied with a reputable custodian. Ideally, the client should be able to use their own custodian, if desired.

6. Do clients receive separate reporting from the custodian? .

For further information about the securities custody industry, I have pdf document about Madoff and one on custody for the European Central Bank, which I will gladly forward to you. Contact me at the address below.

7. How often do you communicate with clients and what do they receive?

In addition to independent reporting from the custodian, the client should be able to receive the level of reporting they need to track their investment performance, transactions and tax reporting.

8. What is your fee structure? Are there any additional costs?

The counselor should disclose all fees - management, trading, custodial.

No matter what is going on in the world around you, you can always find your joy, as this video shows: http://www.findingjoymovie.com/.

Do you have any money management tips to share? Have you become more creative and resourceful with your finances? How has the economic downturn served you?

I welcome your comments and thoughts, either below here or by email: [e-mail] Contact me if you would like a pdf copy of the 8 Common Sense Questions To Ask A Potential Investment Counsel.

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Comments

[MerhabaAbi]

Hi Anne,

Given the opportunity, the best advise you've given is earn more then you spend. Of course this isn't always possible. Many of my friends have lost their nest eggs in the market crash of 09. My philosophy saved me form suffering such loss. I've invested discretionary dollars into my house. I keep up with repairs myself, this saves alot especially when it isn't a critical task that requires a professional. Also, rather then trusting brokers and the market, I put that money into extra princial on my mortgate payments. It's amazing how much of a difference $20 to $100 can make each month. I've been in my house for eight years and pay that little extra when I can. My 30 year loan is at 17 years and 4 months. So far, I've knocked off almost five years just by applying that little bit extra.

Respectfully,
Little Brother

[Kari Henley - Huffpost Blogger]

Thank you for a very timely and relevant post!
Finding trust with a financial advisor is sort of like finding a therapist, as they often play a simliar role! :)

In all seriousenss, I enjoyed the warm and straightforward way you walk us through the process.
And, great coverage this week! Lovely to see you on the Home page! Congratulations on a job well done.
kari

[Anne Naylor - Huffpost Blogger]

Dear Kari,

So true what you say about a financial advisor playing a similar role to a therapist. My investment counsel has a doctorate in theology.

I feel strongly that there is so much fear and anxiety around the subject of finances that I was moved to contributed something constructive on the topic. Prolonged fear is not good for our health on any level.

Thank you very much for your support and encouragement - I really appreciate it.

With love to you,
Anne

[Jason Mannino - Huffpost Blogger]

Thanks for raising these questions! This is useful and great service!

Light ahead!
Jason

[Anne Naylor - Huffpost Blogger]

Hello Jason,

Thank you very much for your presence here. Oh yes, Light ahead for us all - and right now, come to think of it!

Blessings to you,
Anne

[Ed and Deb Shapiro - Huffpost Blogger]

Pt. 2 ...also if you think about it governments have been change ..come and gone..Empires have as well but money has always been the same..ain't that amazing

we have had only one type of money...interest baring based on great and fear of scarcity!

Ed

[Ed and Deb Shapiro - Huffpost Blogger]

Hi dear Anne, Brilliant blog- I always look forward to receiving and see what you are into at the moment

Money is a funny game...money is based on greed and and scarcity ...Deb and I have been working with Bernard Lietaer who co-created the Euro --- on his new book...we were in house editors ...

what is wonderful is complimentary currencies ...and example is air miles...iCC's are exceptionally helpful in difficult times ....as well as regular times. Money was created during the Industrial Revolution for business purposes and was never mant for things like health, education and the like.. CC's is brilliant as it can be of great value and does not negate money but is a compliment to it... It is being talked about in the media lately and there are about 3,000 CC's in the world today.. in NYC there are Time dollars and Berkshires in upstate NY

Joyfully,

Ed

[Anne Naylor - Huffpost Blogger]

Dear Ed

So good to see you here - thank you! I really do enjoy the opportunity here to explore so many aspects of this fascinating life we have. As I woke this morning, after a rather late night, I had the thought that here we are, millions of us, living on this rock whizzing around in a ginormous universe. We are all one on this rock we call earth. And we have found so many ways to pretend we are not one. Amazing.

I have not had complimentary currencies drawn to my attention before. My history may be a bit ropey here but my understanding is that the architect Sir John Soane in the 18th century was commissioned to design the Bank of England, established to fund wars. I think banking might yet benefit from an upgrade of intention. I am sure there are wonderful resources now being developed such that our wealth is better distributed and enjoyed than it has in the past.

Great comment and much appreciated!

Joyous Sunday blessings to you,
Anne

[PresidentRobertBooth]

As far as investments go, I have one rule.

I would never invest in anything that I couldn't see, smell, touch, hear or taste.

[Anne Naylor - Huffpost Blogger]

Dear PresidentRobertBooth

Thank you for your investment wisdom. That sounds very practical and down to earth to me.

Warmest regards,
Anne

[DiogenesOfAlaska]

All points are extremely important and valuable. When it comes to the investment decision itself, maybe the most important is the tandem of Letting go of poor choices of the past and the inane wiseacre-wisdom that if it sounds too good to be true then it probably is.

[Anne Naylor - Huffpost Blogger]

Dear DiogenesOfAlaska

So good to see you here today - thank you for your comment. Your wisecare wisdom (there could be a book of that title) is so very true. I wish I had taken it on board before some of the wild goose chases I went on a few years ago!

I appreciate your presence.

With warmest good wishes,
Anne

[Dr. Judith Rich - Huffpost Blogger]

Hello Dear Anne,

What a relief to get to the Living page after reading about all the conflict and violence in Iran, and of course, Iraq and Afghanistan! This page feels like a safe haven in which to exhale and get grounded in what matters.

You are such a part of this energy! The "residue" of your posts lingers all week long and the rest of us get to bathe in it, so thank you!

Finances matter. Some part of me wishes I didn't have to be involved in that part of my life, but that's not how it works, at least for me. Talk about the least developed function! I am happy to be able to say about my financial adviser what you have said about yours, except for one thing. My portfolio has lost considerable value in the past 6 months, but it's also coming back.

The questions you suggest are crucial. In addition, I would also recommend talking to clients of the adviser you're considering and see what kind of relationships they've forged with him or her. How responsive are they in answering phone calls or emails? Do they use simple enough language so the client can easily understand the concepts being discussed?

I'm amazed at how many different plates you're able to spin with apparent ease. Very impressive!

Thanks for this important and timely post. Have a lovely Sunday, Miss Anne!

Much love,
Judith

[Anne Naylor - Huffpost Blogger]

Dearest Judith,

Always a joy to hear from you here! Thank you. I know just what you mean about the Living Page - it is a lovely safe haven. Your last post has had me resonating on the idea of "choosing" - still is! I feel a blog coming up on the topic.... !

I agree with your suggestions about obtaining a more detailed evaluation of a financial advisor. It can also be useful to find out what others might say who are not clients. As I see it, all a part of our growing more accountable and responsible for the financial aspect of our lives, so that we are really choosing and not falling victim through lack of clear information.

The plates I spin come from a rather arrogant declaration I made when I dropped out of studying architecture at university: "I would rather learn from life than from books." I am still learning - and these days passing on a little of what I have learned!

You are always appreciated greatly by me. Enjoy a glorious Sunday - hazy and sunny here today.

With love and blessings to you,
Anne