Choosing the best investment planner

An investment planner is like a fund manager who helps clients manage their money. The investment planner picks where to invest the money, identifies the risks involved, informs clients of the nature of the market and eventually helps grow clients’ money.

“I think that we usually have the misconception that what makes the rich wealthy is the money that they earn,” says Carissa J. Patag, a certified securities representative, licensed debt instrument trader and licensed mutual fund agent who have been working in the financial industry for 11 years now. “But, in truth, what makes a person rich is actually his ability to save the money that he has earned, grow the money and convert it into a continuous or recurring stream of income.”

This is where the investment planner comes in. The planner, according to Ms. Patag, helps clients convert their earned income into passive and portfolio income (collectively known as investments) to provide cash flow.
Ms. Patag emphasizes that when choosing an investment planner, people should look for credible and reliable planners with proven track records. At the same time, they should go for planners whom they can trust and who understand their needs and wants.

“The usual qualities of an investment planner would be credibility, reliability, and professional excellence. But I think the most important quality would be his or her concern for the client,” Ms. Patag stresses.

She explains that when a client comes to her, she does not right away ask how much money the person has. “If an investment planner asks this as the first question, run away from him/her,” she advises. “It might be that he/she just wants to milk you dry for what you’re worth.”

Planners should first and foremost determine the client’s investment needs and wants, says Ms. Patag. Important questions are time frames, specific financial goals, and degree of risks the client wants to take, among others.

Although planners are expected to explain the different investment options available to the client and the related returns and risks of each, it would be better if clients also conduct their own research, according to Ms. Patag.

For her, there is no specific ideal amount for an investor to begin with as it would depend on the investment instrument chosen. However, she thinks P100,000 is a fairly good enough amount.

- “Source: Karl Lester M. Yap, “Choosing and using an investment planner,” Business World Guide to Bonds and Fixed Income Instruments, May 2005.

Related discussion thread:

• What do you think about hiring a “Registered Financial Planner (RFP)?”