Conflict of interest happens when an investment company pushes you to buy more and more unnecessary investment products that you do not need. This is certainly not beneficial to you because you may not have the budget to do so. Therefore, it is said that the financial company is acting on its own self-interest and not serving the customer (helping customers gain maximum profit).

Be very wary of agents who pressure you into buying “high-commission” products

You should be careful of products like futures, options, commodities and limited partnerships because they often carry high percentage of commission for the financial consultant. These options can be said to be worst for you (the customer) and the best for them (financial planners).

What about the other way round? Investments like no-load (no commission) mutual funds and Treasury bills (also no commission) are the best for you but not so good for investment brokers.

Before you listen to any of them, ask for a prospectus. Usually, you will find the detailed listing of commission the salesperson gets in the prospectus. What is a prospectus? It is a formal legal document describing the details of a corporation (in this case, your investment company).

Be careful of salespeople who preach active trading

They are the ones who tell you to actively trade as many times as you can. There is a reason for this. When you trade on a transaction, you are actually accumulating trading fees. Therefore, in simple math, if you trade many times, you will be charged a high amount of trading fees.

News and hot topics often are their (financial agents) sources of interest. Then, based on this source, they advise you to change your investment plans accordingly. Of course, you are smarter than that, aren’t you?

The solution is a mutual fund that operates on a no-load basis. More appropriately, get mutual funds that are diversified. By this, an expert money manager will work hard for managing and optimizing your money, not to mention you saving some of your money from going into the commission pocket.

If they do not talk about retirement plans

Avoid this type of financial consultants. Retirement is the backbone of every investment portfolio. But if you are a business owner or self-employed, you will be more likely to be advised to set up a retirement account by a financial planner. If you are an employee, you would not likely to have a chance to listen to this advice. But what is the use of asking another person to set up a retirement account for you? You should do it by yourself when it comes to retiring and saving money from going to the commission bracket.

Personal finance is very important, but you might want to know more on something else, security cameras.