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Do Your Homework Before Picking Your Financial Adviser

By    |   Friday, 01 Oct 2010 08:36 AM

I explained last week the importance of picking the proper financial adviser. Three traits are crucial.

It’s all about who you trust.

He or she needs to be trusted to be honest and competent

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First at all, honesty is paramount. Paying a large sum for a large upfront fee is the sign of this. Find a person who offers a money-back guarantee or a low-price trial period. Any adviser who doesn't agree to those terms really isn't confident in his or her abilities, are they?

Second of all, competence and transparency are important. How do you know for sure? You need to ask the prospective financial adviser how much their annual dividend income is from their investments and also their age.

Someone 75 years old with only $15,000 of annual dividend income isn't better than someone who has $85,000 of dividend income and is 45 years old.

Dividends are the first sign of safe, high-yield value investing. Those who have built a “Dividend Machine” that more than pays their living expenses before age 55 has a very good idea on how to beat the stock market and, no doubt, practices value investing.

Dividends are the sure sign of an excellent value investor who actually practices value investing and just doesn’t talk about it.

Finally, the investor’s portfolio should consist of large-cap names preferably above $5 billion in market cap.

These companies, for the money, are safe, high-yielding investments that combine safety, growth and income.

Remember as hard as you have worked for your money, someone else is willing to work twice as hard to separate you from it.

About the Author: Bill Spetrino
Bill Spetrino is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of the Dividend Machine. Discover more by Clicking Here Now.

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I explained last week the importance of picking the proper financial adviser. Three traits are crucial. It s all about who you trust. He or she needs to be trusted to be honest and competentThe World's Greatest Dividend Stock on Sale Now Click Here First at all,...
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2010-36-01
Friday, 01 Oct 2010 08:36 AM
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