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Should You Fire Your Financial Advisor?
Most investors don’t know how to ask this bold and straight-forward question.
Here are comments and questions that many investors do ask themselves:
“I have known my advisor for 20 years, but I don’t know if they’re doing a good job?”
“Fear of making a mistake is why I stay with my current advisor.”
“My advisor keeps telling me to ‘Hang in there, the market always comes back’, but my time horizon is different this time.”
“I took a vague cookie-cutter risk tolerance questionnaire from the broker, it said I was a Moderate Conservative, but what do my investments really tell me?”
“I don’t know what my fees are with my advisor?”
During my time in this industry, I’ve come to the realization that ultimately, what most investors want is the following:
- Transparent fee structure.
- Higher fiduciary responsibility aka the “Clients First” oath.
- Problem solver, not a salesperson.
- Achieve investment and retirement goals.
- Provide risk managed strategies.
In an investor’s financial life, there are two main stages of investing:
The first one is the Accumulation Stage where you earn the money, then invest it. Rinse and repeat. Hopefully, this stage occurs while working with a trusted fee-only advisor who doesn’t work on commissions to guide your decision making.
The second is the Distribution Stage, but stakes are a lot higher here when compared with the Accumulation Stage and the room for error is razor thin. Now, you have at least 5 demands on your nest egg:
1) Growth, but not excessive risk
2) Income for life
3) Income to potentially get larger over time for inflation
4) Protect the principal*
5) Liquidity for emergencies.
The problem is that you can’t just tweek your asset allocation, throw in some magical annuity or REIT and, POOF! You have a total portfolio solution that solves all of these demands and can potentially stand strong through any market environment.
But I’m probably way off here right? You have that now, right? You’re all set, you have a perfect retirement income laddered solution, yet can adapt when your life changes? And if not, you have other money to fall back on for Plan B right?
Investor asks: “Uh, so what do I do now?”
Consider working with a fee-only, investment advisory firm that utilizes a holistic approach to investment management and retirement planning. By doing so, they can help eliminate any potential conflicts of interest that may arise when a firm or advisor is owned by a parent company or who offers proprietary, product-based investment solutions. Make sure they provide, unbiased financial guidance based strictly on the needs, values, objectives, risk tolerance, and goals of each client.
Investor asks “I wonder what firm does that?”
Well, I have some ideas, but you’re probably not interested in that, are you?
Until Next Time,
Scott
skrase@crosspointwealth.com
*Protection is only attributed thru the use of insurance products.
Investment advisory services offered through RCM Wealth Advisors, an SEC Registered Investment Adviser. SEC registration does not imply any level of skill or training.
Annuities have limitations. They are long-term vehicles designed for retirement purposes. They are not intended to replace emergency funds, to be used as income for day-to-day expenses, or to fund short-term savings goals. Investing involves risk.
A fixed indexed annuity is not a stock market investment and does not directly participate in any stock or equity investment. It may be appropriate for individuals who want guaranteed interest rates and the potential for lifetime income. Guarantees are subject to the claims-paying ability of the issuing insurance company.
Lifetime income may be provided through the purchase of an optional rider for an additional cost or through annuitization at no additional cost. If you take withdrawals before you’re age 59½, you may have to pay a 10% early withdrawal federal tax penalty in addition to ordinary income taxes. Withdrawals may trigger early surrender charges; reduce your death benefit and contract value.
Not a deposit • Not FDIC or NCUSIF insured • Not guaranteed by the institution • Not insured by any federal government agency • May lose value
