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Tips on Smart Investing

If you're thinking about investing, there are many steps you can take to make sure your making a smart choice for your money.

When choosing a financial planner or money manager, doing your homework is extremely important.

We sat down with Edward Jones financial advisor Bill Hall to talk about what steps potential investors can take.

His says first know the reputation of the business you are dealing with.

It's safe to use well-known companies like Edward Jones, Merrill Lynch, and Amarillo National Bank.

He says choosing local companies is good too, but always do your research.

"You can get on Internet and check these guys out and they grade them all from AAA's to B's or C's," says Hall.  "You want to make sure you stay with the A rated plus individual companies. Just because it's a name you and I haven't heard of on a daily basis doesn't mean its not a good company, because that's not the case at all."

After choosing the business, getting all information possible will help keep your investment safe.

The Better Business Bureau says to conduct a tough interview.

"Make sure that the investment advisor is explaining to you very carefully what your investment consists of here's the pluses and here's the downside. There is no such thing as a risk-less investment."

"If you're not asking the questions, you should be," he says.

Hall also says to follow-up on checks you write or cash.

Call your bank and ask what account your money was deposited in. 

The Texas Panhandle Better Business Bureau office recently released the following tips:

  • Get Educated:  

    There are many books and resources available online, in stores or libraries which can help consumers understand finance and investing. Not only will a little education early on go a long way in deciphering what financial planners are saying - and potentially help in spotting red flags - but will also help the consumer decide if they really need a financial planner in the first place. Financial planning and investing can be intimidating, but as more consumers are doing their homework, many have decided that they can manage their finances on their own.

  • Look for credentials that matter:

    There are many credentials that financial planners tack onto their names-with varying degrees of legitimacy. One important acronym to look out for is CFP which stands for "Certified Financial Planner." A CFP has passed a rigorous exam and is required to pursue continuing education credits.

    Other groups such as the National Association of Personal Financial Advisors and the Financial Planning Association also offer certification and credentials to help consumers identify financial planners who have made a commitment to ethics and learning. Consumers should also check the planner out with BBB at to see if they have a history of generating complaints and the nature of those complaints.

    Also, if a planner gives out investment advice, he or she must be registered with the Securities and Exchange Commission (SEC) and any state regulators. Be sure to confirm all credentials and licenses with the agencies or organizations directly.

  • Don't be sold by a slick pitch:

    A CFP is required to put the client's financial needs first and above his or her own. One sign of a trustworthy financial planner is that he or she isn't trying to sell their client a dubious new product, investment tool or risky stock. Some financial planners are tied to a brokerage firm and are actually trying to make money for their company and themselves through commissions.

    Another red flag is when the planner claims they can guarantee big returns on investments. There is always a risk involved in investing and no honest planner can guarantee results.

  • Conduct a tough interview:

    After identifying several potential financial advisors, consumers should set up an appointment to meet each one in person. This is an opportunity to not only ask important questions about the planner's experience and expertise, but also to determine whether or not the consumer and planner can easily develop a good rapport.

    A consumer should not be afraid to ask tough questions including how long the planner has been in the business, their qualifications and licenses, their experience with similar clients and if they have been the subject of any disciplinary actions. Consumers can also ask for references of clients who are in their similar financial position.

  • Consider the fee structure:

    There are many fee structures employed by financial planners. Some charge by the hour or a flat rate. Others earn money through commissions on projects sold - which can create a conflict of interest - or a combination of fees and commissions. Make payments to the investment company and not to an individual.

    If consumers feel they already have a good handle on their finances, another option is to find a financial planner who is willing to offer expert advice-and a second look-perhaps on an annual basis, at an hourly fee rate.

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