First, addition by subtraction. Put down the Wall Street Journal. For crying out loud, shut off CNBC. Avoid financial salesmen who charge commissions, but call themselves “advisors.” These are all distractions from what’s important. You deserve an exceptional advisor who focuses on what really matters. These 3 reminders will help you find one.
- There is no secret sauce: The typical salesperson wants to make you a client, slap a fee on your account, and do just enough so you never leave. Your 1% fee buys you a presentation about their “proven” investment strategy, an impressive sounding investment committee and their not-so-accurate crystal ball. As polished as they may sound, remember, there is no secret sauce!
An advisor will tell you that portfolio return is overwhelmingly determined by how the markets perform and the degree to which you’re invested in them. Planning (i.e. your long term financial strategy) is what really matters to you. What resources does your advisor have to help you plan?
- Advice isn’t what it used to be: Your wealth manager should consider all aspects of your financial life. That means estate & financial planning, social security timing, small business planning, family education, retirement scenario modelling and yes, fee mitigation. This advice can often have the biggest impact for families.
Unfortunately, many financial advisors do not have the expertise that can truly help their clients. If you’re not involving your advisor in all of your financial decisions, maybe it’s because you’ve determined they can’t help.
- Drop and give me 20!: Financial advice is much like working out. Neither involves rocket science. And you can do either by yourself, or with the help of a professional. You can certainly work out all by yourself. Or you can hire a trainer to help you. Most people who hire trainers are looking for extra discipline or perhaps creative routines.
The same is true with wealth advice. You can absolutely do it by yourself. There are great tools and technologies available at a reasonable cost that will provide all of the basics you need to be successful. Then why would someone want to hire an advisor? The same reason why someone might hire a trainer. You want a professional to keep you disciplined and provide creative, proactive advice. If your advisor is not doing that, you need to find a new one.
Wealth advice is often shrouded in mystery. It need not be so. AdvicePeriod is committed to providing transparent, proactive and actionable advice.