Expert: John D Smith, CFP - 6/3/2006

Question
I recently started working with an AXA financial planner.  I just
finished part 1 which is assessing my situation and making a
general  financial plan for how I will meet my financial goals.  I
am now trying to decide how to proceed with step 2 which is
deciding the specific mutual funds, IRAs and other vehicles
where I will put  my money and what is the best way to get the
money from where it is now to where I'd like it to be so that I
have a more balanced portfolio.  I have been very happy with the
planner I've been working with.  I paid him $1500 to get this
plan.  While that is a lot of money, I believe I have gotten my
moneys worth and I have no regrets about having  begun this
process.  I think it's one of the best things I've done.
If I continue to work with this same planner, I will not pay him
directly.   He will  get paid from commissions.   I would like
some help knowing how to talk to him about this.   Is it ok to
ask him what percentage he gets paid and when he gets paid
from my accounts?   If so, would you be willing to tell me what
kind of answers I should look for and what kind of answers I
should see as a sign that I might want to work with someone
else?  
Thank you for any help you can give to me.  

Answer
Yes, this is a fare question, and in my opinion, he should be disclosing this information without you having to request this.  I would also expect him to explain to you the different commission schedules (A, B, C shares) and jusity his rational for using mostly AXA mutual funds if this is what he recommends.  Your other option is to work with a fee only financial advisor which means you will be charged a percentage of the assets under management, but no commissions will be collected on the products used. Some people feel this is a better way to go since there is no commission involved to potentiall sway the advisor into using one vehicle over another.  There is no right or wrong here...it is a matter of personal preference and at the end of the day, the advice you get is only as good as the person giving it.  If you would like to learn more about the right questions to ask when hiring a financial planner, visit www.napfa.org.  There is a good list here to use.  I hope this information helps.