The Best Financial Advice I Can Give, Part 3

Here's part three of our series asking five top personal finance experts to offer their single best piece of advice:

“When seeking financial help, work with a fee-based advisor.  Three important differences between fee advisors and commissioned salespeople are: 1). The commissions and management expenses of the investments most salespeople recommend is typically twice as high as a fee-based arrangement; 2). In order to get paid, a commissioned salesperson will move your assets immediately into the market and might move them around arbitrarily, whether or not such moves are prudent; and 3). The taxes on most commissioned products are uncontrollable and excessively high.  In short – you pay more, you are at greater risk, and you have no control over the higher taxes generated by your investments.”

Thomas Grady, author of “J.K. Lasser’s Preparing for the Retirement Boom” and partner at a financial planning firm with $500 million of assets under management. 

Generally, I agree with this advice.  But you must be careful when selecting a financial advisor.  We'll take on that topic in a later post.

Continue to part 4 of The Best Financial Advice I Can Give.