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Insurance Agent Background Checks

April 15th, 2013

There is no substitute for checking in with your state insurance commissioner to see if there have been complaints, disciplinary problems, or licensing actions taken against an agent. You can find your state insurance commissioner’s office by looking at the “states and jurisdictions map” on www.naic.org, the website of the National Association of Insurance Commissioners.
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How do Insurance Commissions Work?

April 15th, 2013

Most agents are paid on commission, which is not surprising given the fact that most policies are sold, not bought. Commissions can be hefty; depending on the type of insurance, fees can be up to 50 percent of first-year premiums, falling to 3 to 5 percent over time thereafter. Commissions also depend on the quality
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Insurance Agent Credentials to Consider

April 15th, 2013

Credentials aren’t a necessity, but they are a way that good agents typically distinguish themselves. Because insurers tend to set prices uniformly, you can’t really play one advisor against the next. If they both quote policies from XYZ National Life, your costs should be nearly identical; it will only be by searching for more and
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Differences between Insurance Agents and Brokers- Independent and Captive

April 15th, 2013

You can hire an insurance agent, who represents the insurers as they sell you products, or you can hire an insurance broker or consultant, someone typically on your side, to represent your interests. You can compare the agent’s services with those of so-called “low-load insurers,” which sell policies direct to the public. Because both agents
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Best Way to Find Insurance Agent Candidates

April 15th, 2013

Nothing beats word of mouth, especially when it comes from someone who has had claims experience with an agent. The best minds in the insurance industry say the place to start your search is with friends, relatives, and co-workers to determine whom they use as an insurer. Smart Investor Tip Word of mouth can be
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How to Interview an Insurance Agent

April 15th, 2013

For most people, insurance is their leaky roof. When it’s sunny, every-thing’s fine. When it rains, it’s too late to fix it. An insurance agent, therefore, is like a roofer, building shelter for clients by providing coverage that protects against storms that could not be weathered alone. But in insurance, as in homes, there are
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Interview Questions for Money Managers

April 15th, 2013

In light of the Madoff case, I am often asked what types of questions a person should ask his or her money manger to ensure that person is working for the client. So, here they are: Your First Meeting with a Money Manager Here are the questions you will want to answer as you go
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When in Doubt about a Money Manager

April 15th, 2013

Consider whether hiring a private money manager really is the best idea for you. Yes, there can be performance and tax advantages, but maintaining control, working with financial planners and brokers, staying involved in the process and using mutual funds-which are much more tightly controlled-may still give you the highest sleep factor, and no amount
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What Is a “Separate Account” with a Money Manager?

April 15th, 2013

Most times, if you are hiring a money manager, it is to run something called a “separate account.” It is “separate” from other pooled monies, such as mutual funds and hedge funds, and is instead managed to the owner’s general specifications. Separate accounts differ from traditional funds because you, the investor, will own the securities
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Madoff’s Gift to Investors

April 15th, 2013

For all of the pain Madoff caused, he left others with a lasting legacy, namely the importance of doing your due diligence and looking for the red flags in the relationship. His case personified many of the things that any investors considering a money manager should have worried about all along; now, they’re aware of
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Finding Money Manager Candidates

April 15th, 2013

You’re not going to want to go dialing for dollars or using a referral service here; instead, you may be introduced to a money manager by a current advisor, or you will find one by looking at a database that looks at performance, such as Morningstar Inc., the Chicago research firm known for its ratings
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Interviewing a Money Manager

April 15th, 2013

Financial planners can act as money managers. Brokers can, too. The guys who run your mutual funds are money managers. Hedge fund managers, guys who trade “separate accounts,” and virtually anyone who promises to oversee your investment capital are money managers. In fact, so long as you follow a few regulatory rules, you could hang
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Intuition Is Important; Greed Is Not

April 12th, 2013

Ideally, you’d like to be able to introduce your broker to your children one day as “the person who helped us reach our goals.” For all of the questions, background checks, and concerns, there will be no substitute for your sense that the advisor can deliver on that potential. Do what you can to get
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What if My Broker Changes Firms?

April 12th, 2013

There are many reasons why brokers switch firms. It’s a normal part of the business, but you will want to know why. I once met a couple whose broker was changing firms for the second time in three years, moving from a national firm to a regional one. They worried about the small firm but
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Building the Relationship with Your Broker

April 12th, 2013

There’s an old saying that the best way to get good market information is to “take a broker to lunch.” It’s not far from the truth. The best way to develop a relationship with a broker is to be able to talk about money and investing when there is no commission on the line and
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Interview Questions for Brokers

April 12th, 2013

With brokers, you have an initial interview and then subsequent mini-interviews whenever you discuss making additional investments or changing your portfolio. The first interview should define the relationship and establish your comfort level with the broker; the other is part of ongoing maintenance and is designed to keep you informed, the broker honest, and the
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Important Credentials For Brokers

April 12th, 2013

Brokers sometimes pursue the same credentials of a financial planner. Like a planner, however, no credentials are necessary. A broker, however, must pass exams in order to practice, the basic tests being known as “Series 6″ and “Series 7″ exams. Those will not necessarily be much help when it comes to lifetime financial advice, since
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How Do Broker Fees and Payment Plans Work?

April 12th, 2013

Unless he or she charges an asset-management fee — meaning he or she takes a slice of the assets managed each year — or a flat fee for account management (as in the “cash-management accounts” common to many brokerage firms), you should expect any broker you meet to be paid on commission. It’s not always
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Checking out Broker Candidates

April 12th, 2013

Stockbrokers typically file a Form U-4 to register with the Financial Industry Regulatory Agency (FINRA), which covers the details on the advisor’s past. As this book was going to press, FINRA had proposed stepped-up disclosure requirements that would make it easier to discern when a broker had committed violations of securities law or had disciplinary
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Do Name Brands Matter with Brokers?

April 12th, 2013

It is more important to have a broker who is expert at what he or she does than to have someone who is affiliated with a national wirehouse like Merrill Lynch, Morgan Stanley, or the other big names. Yes, the big names have access to their own big stable of researchers and may sell exclusive
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