Invest in Portland

Q: We were taking a walk in Princeton, New Jersey and were shocked by how many investment firms lined the streets. What are the major differences investors should consider when evaluating different investment firms, their services and their Financial Advisors?

The Problem – Choosing the Right Financial Advisor at the Right Firm. A recent internet based yellow page search for the words “stock broker” lists over 50 results in Princeton, New Jersey alone. They all seem the same, with one name fancier than the next. Their services range from stock brokerage to financial planning and wealth management. With so many firms to choose from, investors can easily make a wrong decision, which they will regret for the rest of their lives.

The Solution – A Little Due Diligence Goes a Long Way. Choosing the right financial advisor at the right firm is similar to selecting the right surgeon at the right hospital, but with a couple twists. Every investors needs to understand the different types of investment firms before they can make an educated decision.

Let’s start with the largest firms in the industry. These are the firms we see advertising during the events like the Super Bowl. Please pay attention to the upcoming twist. These firms are publicly traded companies that trade on the stock exchange like any other stock. And, like any other stock, the Board of Directors must act in the best interest of shareholders – not clients of the firm.

Many of the middle and smaller sized firms are not publicly traded and can act in the best interest of their clients – not the shareholders. Finding out if the investment firm you are considering is a publicly traded company is as easy as looking it up online or calling the firm directly.

Understanding the Firm’s Registration is Critical. Fiduciary duty is the highest level of duty an investment firm can exercise. When accepting fiduciary duty an investment firm must, by law, act in the best interest of its clients – above and beyond those of its shareholders or employees. All investment firms must register with security regulators. Most of the large investment firms register as a broker dealer, avoiding the obligation of fiduciary duty in the process.

If a firm registers as a Registered Investment Advisor (RIA) they are obligated by law to accept fiduciary duty. Here comes another twist. Some investment firms register as an RIA, but claim those aspects of their business are ancillary to their practice – mitigating their responsibility in the process.

If you can only remember one thing from this article, here it is: If you want the investment firm you are dealing with to place your interests above and beyond their interests, have them clearly accept fiduciary in writing on their company letterhead.

Understanding the Firm’s Services is Critical. Many of the larger firms imply they provide independent financial planning and investment management services. In reality, their financial plans are “free” reports designed to lure you into their own investments. No doubt, there is some disclosure buried somewhere in the documents explaining all the conflicts, but most people do not have the time to search for them.

Many of the middle and smaller sized firms imply they provide independent financial planning and investment management services. In reality, they are insurance salespeople trying to sell as much insurance as you can afford, and then some. One good litmus test is to find an investment firm that can assess a fee for a financial plan, whether or not you choose to utilize any of their other services. Another good litmus test is to find an investment firm that does not have their own investment products.

The Financial Advisor’s Background is the Most Critical Aspect of Your Evaluation. When meeting with a Financial Advisor, consider it an interview. The reality is you are hiring them for the most important part of your life… well, at least your financial life.

Some important questions to ask include:

1. Where did you go to college or graduate school?
2. What degrees do you have?
3. What licenses and certifications do you have?
4. How long have you been in the industry?

Ideally, your Financial Advisor should have a strong academic background, carry the appropriate licenses for your needs and have good experience. Two designations stand out in the industries of financial planning and investment management: Chartered Financial Analyst (CFA), a program based on a series of progressively more difficult exams, and the Certified Financial Planner (CFP), a program based on one exam.

Conclusions. Selecting the right investment firm and Financial Advisor is a critical decision. Utilizing the criteria discussed in this article can turn a difficult task into one of ease. If you are already working with an investment firm and a Financial Advisor be sure they can provide the level of service and independence you deserve.

09/04/07
Skloff Financial Group
Question of the Month
By Aaron Skloff, AIF, CFA, MBA

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Most of the mutual fund houses, brokerage firms, banks are having facility of making online investments in Mutual Fund schemes in India.

Benefits of online investments:

· No need to visit the office of the broker or distributor.

· No need to filling Application Forms manually.

· Once the account (Folio No.) is created making additional investment is very easy and time saving.

· By applying for E-PIN from the company, easy to manage funds.

· Redemption or Switch between one scheme to another is just click away.

· Account Statement 24/7

· Investor can track the investment 24/7.

· If you wish to make maximum profit, you should invest regularly and if you can manage to invest on every occasion of decline in SENSEX you are about to make maximum profit. To do this best option of making investment is Online Investment.

Disadvantages of Online Investment:

No personalize advice; investor has to take his decision at his own.
Very few offers personalize Portfolio tracker with facility to add all Mutual Fund investment, including made earlier through different distributor in same portfolio.

To overcome the above disadvantages it is better to invest through a broker who provides value added services like flexible portfolio tracker with facility of including all investment record in at one place. It is also better to invest through a broker who provides advisory services, some of them are providing it free of cost and some of them are charging for these services. It will totally depend on you to choose paid or free service. If you are customize with the mutual fund investing it is wise to choose free advisory service. Many sites provides data of top performing mutual fund schemes, rating criteria is different and hence one cannot relay on this data while taking investment decision.

The points should be taken into consideration while investing in Mutual Fund scheme.

Time horizon: It is most important factor. If you are long term investor there is chance of getting better returns. In this case you can exit at any time when you have made sizable profit.

Risk taking aptitude: It is also most important factor, if you are afraid for losses in short term you should avoid investing in equity schemes. In such case you should go for hybrid schemes or pure debt schemes. Investing in pure debt scheme is more profitable than investing in Banks & Post.

Diversification: It is better to invest in diversified schemes for new investors. For customized investor, who is capable of tracking his investment and market conditions, sectoral schemes is best option, in sectoral schemes timely exist is important.

Diversification by schemes: It is always better to invest in different schemes of top mutual fund houses that to put all money in one diversified scheme.

Past performance: It is the most essential criteria and hence one should view the historical performance of the scheme. Considering returns for the period of 1 Year, 3 Year, 5 Year and since inception will help you to take your decision. The scheme which outperform in all types of returns category is safer choice for investment.

Invest regularly and if you invest at the time of every fall in Market you are going to make huge profit over the period of time, it is my own experience. My strategy to invest at every fall in SENSEX by 2%. In last many years I have adopted this policy successfully.

Sadanand Thakur is expert in Mutual Fund and exclusively giving advice for mutual fund investments. To know more about mutual funds in English and if you wish to have the same in Marathi the option is also available here. At present online investment in Reliance Mutual Fund schemes are available on this site with instructions for new users. Using online investment facility for regular investment is more profitable for investor. Invest online regularly at the time fall in BSE SENSEX by more than 2%.

Coffee is a kind of beverage that is one of the most consumed in the world. There is California-based coffee chain called The Coffee Bean which the first one opened in September 1963. As it is affectionately known has become the model for a successful coffee and tea company. They not only offer the beverages but also coffee machines.

There are many of coffee machines available in this store. The system, combining innovative technology and design, offered is more than single cup coffee machines. One button of the easy-to-use beverage system delivers one perfect cup. There is a machine that is used to produce the traditional Italian coffee, espresso, called espresso machine. This machine has a unique twin pressure to capture all the aroma, texture, and flavor. For examples, Contata, merging timeless design and effortless functionality, it satisfies the eye as well as the palate. In form as well as flavor, its compact size and classic colors appeal to good taste. Another machine is Kaldi that sleek design which meets vibrant color. It’s streamlined, with its smooth curves and gleaming metallic, looks match its ease of use. The technology, innovative one-touch, delivers perfection in every cup. In order to make a full complement of beverages, it is better to purchase the milk frother.

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