A Suze Orman exclusive

I am constantly amazed where people get their investment advice. It's your money - your future - and yet you tend to trust just about anyone with your money. You'll take a stock tip from the guy at the gym who you don't even know. You'll let your well-meaning but clueless Aunt Louise talk you into investing in her mah-jong partner Betty's nephew's company. And you don't know the nephew - hey, you don't even know Betty - let alone understand what it is his company does.

But I also want you to realize it's just as bad to blindly accept the advice of any professional money adviser. Now I want to be very careful here: there are plenty of wonderful financial planners and financial advisers working very hard for the benefit of their clients. But not all the pros know what they are doing. I am not even talking about fraud (though that happens too). I am just talking about basic ineptitude. They go through a company training program and come out cluelessly gung-ho to push the company's agenda - whether it is touting a stock or an insurance policy - that they have been told is good for you. Yet in reality it is only good for them. They will make a lot of money if they sell it to you. Or they have been "convinced" to steer you away from products that meets your needs, in favor of their much more expensive deluxe versions, loaded with bells and whistles you don't need.

Here's what you need to do before relying on anyone for financial advice. First, if you are working with a financial planner, ask for their professional credentials. You want to work with a Certified Financial Planner. Next, ask how you are going to pay them. If it is commissioned-based, I'd say you've got yourself another big blaring warning signal. Come on, let's just use a bit o' common sense here. They will get paid for selling you a specific product or investment. So, um, I'm thinking they might not be too motivated to get the best deal for you if it means a lower commission for them. My advice: work with a fee-only financial planner. They will charge you a flat rate for consulting advice and, say, a fixed rate - typically one percent - on any money they manage for you. You can find fee-only advisers at www.napfa.org.

Ah, speaking of giving your money to someone else to look after: If any adviser or broker ever asks you to hand over your money by writing a check directly to them, get away as fast as possible. A legitimate financial adviser will never ask you to do that. Your money should be transferred directly to a reputable brokerage or fund firm.

I highly recommend checking out the NASD website, where you can check on the background of brokers and advisers and see if they have run into any "conduct" problems. The site also has links to state regulators, which are another good source for doing a background check. You can also protect yourself by checking out recent Investor Alerts.

Never Totally Abdicate
If you find someone great to work with, go for it. But notice that I said "work with." It is your money, your future. So how can you not stay involved? A good financial pro will want to meet with you at least once a year, maybe even more often, to discuss how your current choices are working toward meeting your long-term goals. You should always decide as a team how to manage your money.

Diversification Buys You Some Fraud Protection
In the Age of Enron, where investors and employees can lose everything because of executive fraud, you need to be a super-careful investor. My bottom line is that you should never invest in a company unless you - or someone you hire, whether it is a financial adviser or a mutual fund manager - clearly understands the financial statement of that company. I guarantee you that far fewer people would have been Enroned if they had followed this simple advice; when you really looked, it was impossible to understand what was going on there. That should have been a warning.

But even more importantly, the best way to protect yourself from corporate fraud is to hedge your bets. Diversify. Don't ever have all your money riding on one or two stocks. 'Cause you never know, do you? Never have all your retirement savings invested in your company stock. I know the vast majority of corporations are doing the right thing, but when it comes to your retirement you simply can't afford to run the risk that yours is one of the ones that isn't. Don't think it can happen? Just ask the hundreds of Enron employees with empty nest eggs.