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Know When To Can Your Financial Planner
Posted by Kevin Purdy at 3:00 AM on October 7, 2008
Former financial planner Nora Dunn knows that lots of folks are itching to do something after seeing their latest investment statements—maybe to the point of axing their advisor. Not a great idea, she writes, unless he or she is unresponsive, pushy, or, even worse, trying to sell you a fortune-telling service:
If they call you wanting to make drastic changes based on what they think the market is going to do, run. What they should really be focused on is you, your goals, and a plan (and portfolio) that will weather the good times and the bad. Sure - small adjustments here and there may be prudent, but moving everything in and out of different asset classes is a losing game. They may get it right a few times, but all it takes is one bad calculation to lose everything you have gained.
Dunn's got eight other no-nos to watch for with any advisor. Any of them ring call up a familiar story? Warn your fellow readers (or praise the good advisors) in the comments.
Comments (AU Comments · US Comments)
There are currently no AU comments for this post.
Norcross
Posted 4:47 AM 7/10/08
I think a large part of this problem is due to many people nearing retirement, and not having enough time to 'wait it out' in the market. that being said, their advisor should have been moving them into more conservative investments a few years ago, not due to any 'telling' of the market, but rather because that's the prudent thing to do.
Norcross
NICU
Posted 4:16 AM 7/10/08
If your financial adviser didn't see this economic crisis and housing bubble collapse coming a few years ago then its time to fire them. Its time to listen to good advisers who saw this mess coming as early as 2002 Peter Schiff - [en.wikipedia.org] is one of the best in the world.
If any financial adviser was good at their job then they'd already be rich and they wouldn't have to work. Would you hire a mechanic who couldn't fix his own car?
NICU
heavylee-again
Posted 4:54 AM 7/10/08
@NICU: So you're saying that any good financial adviser would be rich enough to retire already?
heavylee-again
NICU
Posted 5:52 AM 7/10/08
@heavylee-again: I haven't seen a helpful financial adviser. Most work with or for a company and get paid to push their funds/stocks.
This site is dedicated to using the web to improve your life, use sites like www.fool.com and take control over your own investments.
NICU
bobbo33
Posted 6:03 AM 7/10/08
If you must get a financial planner, get one who works as fee-only
(no commission = no pushing bad products):
[www.napfa.org]
(I'm not affiliated, so I can't vouch for any of them.)
bobbo33
Auld_Lang_Ziety
Posted 6:30 AM 7/10/08
So if your CFP called a couple of months ago and said "I want to get you out of your major positions in AIG, Lehman Bros, IndyMAC, Bear Stearns, because I think the financial sector is going to take a hit," you should have fired him, right?
Auld_Lang_Ziety
vered
Posted 6:36 AM 7/10/08
Fee-only is still expensive because they often charge 2% of your net assets regardless of performance which is outrageous.
You can take care of your own finances.
vered
Greg.Rowler
Posted 7:26 AM 7/10/08
Vanguard and Fidelity are both discount brokerage houses that charge very low maintenance fees ( <1% ) on their index and mutual funds. I highly recommend their "target retirement" accounts for anyone who wants a "set it and forget it" way to plan for retirement.
Greg.Rowler
PhilHut
Posted 9:03 AM 7/10/08
I'll second the Vanguard nomination. Very low fees, conservative policies, great web site. After mixed results at picking stocks on my own (okay, I sucked at it), I too have handed my retirement assets over to their targeted retirement accounts. I'm in their 2025 fund and it's currently using a 78% stocks/22% bonds balance.
PhilHut