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Another day, another 400 points down.

The worst thing about the market lately is that if all you did was read that first line, you wouldn't know if this story was from today, yesterday, or pretty much anytime in the past three months. It's just been that bad, that long -- day in and day out, you're suffering a little bit more. It adds up.

If you're getting close to the breaking point -- and a lot of people are -- there's nothing wrong with looking for some advice from professional investment advisors. But before you rush into anything, you should know what to expect -- and what should set off alarm bells.

It's a dog-eat-dog world
If you think you've got it bad, think about what many financial advisors are going through. They're dealing with angry clients who don't hesitate to share their frustrations at seeing so much of their money go up in smoke. They're working with others who must face the prospect of changing their entire way of life because of their financial losses.

All the while, only advisors with nerves of steel could avoid thinking about their own personal situations. Remember, plenty of advisors follow the same investment advice they give to their clients, and thus are sitting on huge losses of their own.

And even though workers across the nation are all worried about their jobs, the cuts they fear are already a reality in the decimated financial industry. JP Morgan Chase (NYSE: JPM  ) expected to lay off about 7,000 Bear Stearns employees after its takeover earlier this year. Citigroup (NYSE: C  ) has cut 75,000 jobs in the past two months. Even once-safe employer Goldman Sachs (NYSE: GS  ) is dumping 3,200 employees, while Morgan Stanley (NYSE: MS  ) also plans a reduction of about 10% in two key groups.

None of that means that you can't get good financial advice from professional advisors. But it does mean two things: First, even good advisors have a lot on their minds other than your investments; and second, you need to be especially vigilant right now to protect yourself from suggestions that could cost you in the long run.

Warning signs
In particular, here are some things to watch out for from a financial advisor:

  • High-commission products. During a bull market, paying a sales load or a high expense ratio for investments often goes unnoticed. But after you've lost 50% or more, slicing another 1-2% or more in fees off the top is just adding insult to injury.
  • Gimmicks. With the market down, you'll see more products that offer principal protection and other guarantees. While these would have had more value back when the Dow was 7,000 points higher than it is today, financial marketers know that demand for these products always follows bad performance. Don't pay for protection that has come too late to help you.
  • Inconsistent advice. Too many advisors offer the hot investment. When the market's skyrocketing, they'll push risky fad stocks like First Solar (Nasdaq: FSLR  ) . Only after they've come crashing down to earth will they start singing the praises of Procter & Gamble (NYSE: PG  ) and Johnson & Johnson (NYSE: JNJ  ) as recession-beating investments.
  • Kowtowing. When times are tough, advisors will be tempted to do anything it takes to get your business. But the best advisors have strong opinions that don't bend -- yet they're still willing to listen to your comments and concerns.
  • Pay. Make sure you understand how your advisor's getting compensated. If you aren't paying much, rest assured that someone else is -- and you may be the one who pays in the end.

At times like this, getting a good financial advisor may make the difference between finding the discipline to stick out the tough times in the market and making a huge mistake with your money. Just make sure the advisor you use has your best interests at heart. That's easier said than done -- but if you keep your guard up, you'll be able to protect yourself from the unscrupulous advisors out there.

For more on getting through tough times in the market, read about:

Ever since the last bear market, our Motley Fool Stock Advisor has been giving investors exactly the help they need to find and invest in market-beating stocks. Fool co-founders Tom and David Gardner give you their best advice month in and month out. See for yourself how Stock Advisor can help you with a free 30-day trial.

Fool contributor Dan Caplinger still avoids financial advisors like the plague. He doesn't own shares of the companies mentioned in this article. JPMorgan Chase and Johnson & Johnson are Motley Fool Income Investor selections. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy gives you the info you need.


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Dan Caplinger
TMFGalagan

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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