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The Right Questions To Ask For Financial Advice You Can Trust

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April 19,2016

the staff of the Ridgewood blog

Ridgewood NJ Many people looking for good investments or hoping to save for retirement are wary of the very financial professionals who can help them reach their goals.

That was illustrated once again recently by the 2016 Harris Poll Reputation Quotient Report, which showed that just 37 percent of people surveyed believe the financial-services industry has a solid reputation.

The good news is that’s an improvement from past surveys. The bad news is that the pharmaceutical industry, the tobacco industry and government are the only ones with worse reputations.

Skepticism about the profession may sting a little, but there’s nothing wrong with caution when shopping for a financial professional, says Lou Desepoli, president of Desepoli Wealth Management (www.desepoliwealth.com).

“It’s important for investors to do their homework,” Desepoli says. “Don’t be timid about asking questions. A financial professional should answer any questions you have, and they should be able to provide details about fees, fiduciary standards and a client bill of rights.”

Mike Desepoli, Lou’s son and a wealth adviser at Desepoli Wealth Management, says all financial professionals may work with the same market conditions, but that doesn’t mean they are all created equal.

“How they assess, evaluate and react to the market is what sets one adviser apart from another,” he says.

The Desepolis say just a few of the topics an investor should broach when looking for an adviser include:

 

  • Fee transparency.

Ask how they are paid for the investments they recommend. Are they paid commissions on investments or other products they sell? Do they receive payments from mutual funds or investment companies they recommend? “What you’re trying to determine is whether they push investments that are more beneficial to them than they are to you,” Mike Desepoli says. “It’s best if the firm just charges a fee based on the value of the assets they manage for you. That makes it in their best interest for your portfolio to grow.”

  • Regulatory controls.

Find out what safeguards they have in place to protect against fraud. Have they ever been disciplined for unlawful or unethical actions? How do they ensure the firm remains in compliance with legal and regulatory statutes?

  • Experience and credentials.

The products an adviser can sell and the investment advice they can give are tied to their credentials. So find out what licenses and certifications they have.

 

“Most people spend more time shopping for a car than they do a financial adviser,” Lou Desepoli says. “But you want to be an informed consumer when it comes to who will handle your life savings. That person’s investment philosophy, their client-service philosophy and how they communicate with clients are all topics worth asking about.”

About Lou Desepoli

Lou Desepoli is the president and founder of Desepoli Wealth Management (www.desepoliwealth.com). He has more than 30 years’ experience in investment management, financial planning and tax consulting. He is also a CPA.

About Mike Desepoli

As a wealth adviser for Desepoli Wealth Management, Mike Desepoli serves as a wealth management resource to business owners and executives, assisting them in making proactive, personal financial decisions.

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Rep. Scott Garrett addresses “Preserving Retirement Security and Investment Choices for All Americans”

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Sep 10, 2015
the staff of the Ridgewood blog

WASHINGTON, D.C. – Rep. Scott Garrett (NJ-05), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, delivered the following opening remarks at a Joint Oversight & Investigations/Capital Markets Subcommittee hearing entitled “Preserving Retirement Security and Investment Choices for All Americans”:

Congressman Scott Garrett’s opening remarks as prepared for delivery:

Every day, millions of Americans look to a broker dealer or investment adviser for guidance on what to do with their hard-earned savings and to help them achieve a secure and prosperous retirement

Once a privilege enjoyed only by the super-wealthy, personalized investment advice and access to the financial markets is now something that can be enjoyed by Americans of all income levels

The 2008 financial crisis and the current market turmoil have highlighted the importance of such advice, as numerous studies show that investors who work with a financial professional receive better and more consistent returns on their investments, while those who invest on their own often times make the mistake of “buying high and selling low”

In fact, the Department of Labor estimated in 2011 that people who invest without the benefit professional advice make errors that can cost them $114 billion every year

That makes it all the more curious that this same Department of Labor is now marching forward with a regulation that will upend the ability of Americans to receive such guidance and which threatens the retirement security of the most vulnerable within our society

When President Obama announced the rulemaking earlier this year, a release from the White House stated that the rule “…is taking a step to crack down on those…Wall Street brokers…who don’t put the best interest of working and middle class families first.”

But in looking down our panel of witnesses today and in reading through some of the 2,300 comment letters received by the DOL, it’s pretty clear that the biggest impact of this rule is going to be felt far from Wall Street – and millions of middle or lower income households may ultimately have no place to go for advice

Moreover, the SEC continues to contemplate implementation of a uniform fiduciary standard under Section 913 of the Dodd-Frank, a rulemaking that remains unsupported by empirical data and which could directly conflict with a DOL rule

So it’s clear that the time for Congress to act is now – and I want to commend Mrs. Wagner of Missouri for her continued leadership on this issue and for again putting forth a thoughtful piece of bipartisan legislation that will help preserve access to financial advice for Americans of all income levels

I thank our witnesses again and look forward to the discussion today