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Keep tabs on your financial adviser

- Alan Lavine and Gail Liberman

Have someone managing your mutual fund investments? If so, are you keeping tabs on him or her? Too many shareholders don't.

  • Talk to your adviser at least every three months and visit his or her office annually. If he or she has made any changes, ask why. Get details. Ask what the strategy will be if economic conditions change. Be sure to jointly review your financial goals. Inform your adviser if your financial condition or tax situation has changed.

  • Know where your money is. When your adviser invests in stocks or mutual funds, your money is held by an independent financial institution, known as a custodian. Know your account numbers, how to contact the company, and the names of chief executives.

  • The company that has custody, typically a broker-dealer, bank or trust company--known as the--custodian firm--is required to provide you with financial statements at least quarterly. Read them. Make sure that these statements are coming to you directly from your custodian firm--not from your adviser.

  • How well is your adviser managing your money? Compare investment returns with the S&P 500, for investments in large company stocks; the Russell 2000 index, for investments in small company stocks; and the Lehman Brothers Aggregate Bond Index for bonds. Foreign stock returns should be compared with the MSCI EAFE index. Expect returns to be less, however, due to fees deducted from your returns.

  • How often is your adviser making changes in your holdings? If it's happening too much, ask questions.

  • Make sure your adviser has a back-up system in case of a disaster. Does he or she have duplicate records of your account at another location? If so, get the address and phone numbers at that location.

  • Make sure your adviser has a qualified person to manage your account if he or she becomes incapacitated.


Spouses Gail Liberman and Alan Lavine are syndicated columnists. Their latest book is "Rags to Retirement (Alpha Books)." You can e-mail them at MWliblav@aol.com.

To read more columns, please visit the column archive.

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