It is not nice, but the truth is about 98% of them have no clue on how to protect client funds. Yes, they can help with allocation of funds to various categories such as housing, vacation and travel expenses, amount to be put into savings, savings for college for the kids, and other subdivisions, but when it comes to protecting or making money in your retirement account they follow the losing Wall Street line.

Your long term retirement program is the one they know very little about. They have been taught the Ten Commandments of Wall Street any one of which will break the investor. The number one Commandment has always been Buy and Hold. Wall Street and that includes all stock brokerage companies don’t care if you lose money as long as you don’t sell or go to cash. As long as the client remains in the position the company continues to make money even if no trades are made.

OK, you are now sitting in front of the financial planner or maybe he came to your house. He first qualified you to be sure you had at least $50,000 or more for investment otherwise you definitely would be in his office. He has a breakeven point of the amount of money (people) he will talk to.

The investor will be required to listen to the sales pitch of how well he has done for others and he can do the same for you, but be sure you know what happened to his model portfolio from 2000 to 2003. Beating the S&P Index doesn’t count if it lost money.

You will want to know if charges are fee based on the amount of your holdings or on commissions of what is purchased. If fee based, usually about 1.5%, then he must rebate all commissions to your account.

The next question is the make or break one. If not properly answered the prospective client should quietly get up and leave – or he will go broke. Mr. Financial Planner, what is your exit strategy? This is crucial.

Any financial planner (or broker) that does not have an exit strategy will lose money over the long run. If the answer comes back as a variation of Buy and Hold, leave immediately. The strategy must have the investor out of the market during bear periods.

Investors who had money in 2000 are still not “even” today. A Money Manager must have a plan to prevent big losses. If the exit strategy is good it will protect the portfolio. Then get it in writing on the company letterhead and signed by the Supervisor or Branch Manager. It is possible to make the person also personally liable if he does not follow the plan.

Make him prove he will make money and protect your funds during bad times.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know. Copyright 2006 All rights reserved.

Copyright 2007 Albert W. Thomas All rights reserved. Author of "IF IT DOESN'T GO UP, DON'T BUY IT!"