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From: eder@ssc-vax.UUCP (Dani Eder)
Newsgroups: net.invest
Subject: Re: Anyone know "Ford Associates"?
Message-ID: <327@ssc-vax.UUCP>
Date: Wed, 30-Oct-85 15:47:56 EST
Article-I.D.: ssc-vax.327
Posted: Wed Oct 30 15:47:56 1985
Date-Received: Sat, 2-Nov-85 01:39:54 EST
References: <643@pyuxjj.UUCP>
Organization: Boeing Aerospace Co., Seattle, WA
Lines: 57

> We were recently contacted by a representative of Ford Associates in 
> Florham Park, NJ.  Apparently this firm handles 'financial planning' 
> for people - i.e., they offer to review all of your finances (salary, 
> savings, taxes, investments, assets, etc.), help set up budgets, and 
> propose different investment 'vehicles' to reach your financial goals 
> through a long-range plan.  There is no 'fee' charged for their services.
> However,their only stipulations are that, if you go along with them 
> on a review, you have to agree to 1) go through them for investing in 
> the 'vehicles' they suggest IF you do decide to make those investments 
> and 2) give them the names of five other people/couples who might be 
> interested in the type of service that they offer.  Altough it initially 
> doesn't sound too bad, I am a bit concerned about certain aspects:
> 
     Most investment advisors today are really salesmen in disguise,
whether it be for insurance, stocks, limited partnerships, mutual funds,
etc.  In order to protect your interests you should ask the following
types of questions and get satisfactory answers:

     Does your firm have any connection with the investments you offer
beyond being sales agents?
     What percentage of my investment would be consumed by commissions
and other sales costs?
     If I invest today, will I have the option of changing my mind for
the next three days? (Direct sales in the home are required to have
this option by the Federal Trade Commission)
     Are you or anyone in your company (a)registered with the Securities
and Exchange Comission as an investment advisor (b) a Certified Financial
Planner (CFP) (c) a Chartered Financial Analyst (CFA)?

     If you are concerned about the advisor being partial to whatever
he is selling, then you can look for someone who represents a full
service financial house.  Examples are Sears (insurance+real estate+
securities) and Prudential-Bache (insurance+securities).  If you want
even more impartiality, look for someone who does a financial plan on
a set fee or by the hour, like an accountant.  A mark of experience
comparable to a CPA for accounting, is the CFP or CFA, which both
require a series of examinations and three years experience.

     Another type of advisor is the 'money manager', who will take your
money and invest it for you, taking care of all the details, and is paid
on some combination of amount you have to invest and the manager's
performance.

     For people in average circumstances (don't own a business or income
property), producing a financial plan is quite straightforward, there
is even software you can get to help you do it yourself.  The knowledge
a planner uses is (a) what alternative investments are appropriate for
an individual's circumstances and temperament and (b) formulae and
algorithms to determine the best proportions among the investment
choices.

     I am studying to become an investment advisor, and would be glad
to offer you advice based on my knowledge, at no charge.  It would be
good practice for me.      

Dani Eder / Boeing / ssc-vax!eder