4 Questions to Ask Your Next Financial Planner
Hiring a Pittsburgh financial planner is an incredibly personal - and important - decision.
This is someone who will be perusing the intimate details of your financial life, and could potentially hold your future retirement success in their hands.
ost experts agree that anyone would benefit from working with a financial planner, no matter their level of income. However not all financial planners will be a good fit for you.
Questions to Ask
Before you start working with a financial professional, it's a good idea to ask them these five questions:
1. Do you have experience working with others in my life situation?
Your financial planner isn't there to judge you, their job is to help you make the best of any financial situation.
This could mean helping you bail out from a bankruptcy, developing a new plan now that you are divorced, or figuring out how to retire early.
Finding a financial professional that has experience working with other clients similar to you, with a comparable attitude towards risk and similar needs, is a good first step.
2. Are you willing to sign binding fiduciary and non-disclosure agreements?
A fiduciary agreement, also known as being held to a fiduciary standard, means that your financial planning professional is required to place your interests above their own -- even when it means they make less money on a trade or sale.
Non-disclosure agreements are especially important for high net worth individuals, as this reinforces the standards of privacy required for anyone handling your personal and financial information.
3. How are you compensated for helping me?
Financial planners are often making money from a variety of sources: direct hourly or flat-fee payments from clients for managing financial interests and a percentage or fee for trades.
It's important to know exactly how your advisor is compensated before you make a final decision (but it's important to remember that you often get what you pay for!
4. Tell me about a client's success (and a failure!)
While most professionals are interested in telling you about fantastic success stories, understanding where something went wrong is just as important to future learnings.
Having a candid discussion up-front about how things can go wrong or what helps them go right is an important conversation and will also help you determine if you can trust the advisor.
The Big Takeaway
Most people find working with a financial planner to shed light on many financial factors they had not considered. You may learn more about financial principles and ways to improve your family fortune – or simply get a plan in place that leaves you feeling more comfortable about your future.
What to Consider When Hiring a Remote Virtual Financial Planner
Choosing your financial advisor is based on your needs, goals, and comfort levels, aligned with the advisor’s expertise. So, the answer to the question is no. Remember this is a joint relationship that involves your input to the advisor. An experienced financial advisor will help create investment strategies to generate sufficient wealth and retirement income.
Thanks to technology, tech-savvy consumers have an option of working with a remote or local financial advisor. Interactions include face-to-face meetings via video conferencing, regular follow-up calls and email communications.
Your first physical meeting or virtual communication is typically designed to discuss your current situation and your future goals. The purpose is to develop a plan and build an investment portfolio based on your goals. Once the getting-to-know-you sessions (preliminaries) are completed, customary communications and annual meetings are essential.
For many clients, the lack of understanding or the uncertainty of the markets is daunting. An experienced financial advisor is going to help organize your finances for maximum benefit from now into retirement.
Planning Today for Tomorrow
Whether you choose to work with a local or remote advisor – an assessment of your personal and financial needs are critical to developing an investment plan. If you prefer traditional face to face visits, working with a local advisor is best. If you’re comfortable with mobility and have a set perception of the chosen advisor’s characteristics, expertise, and skill to achieve your financial goals - geographic distances will disappear.
Remember, you may be retiring outside of your local area. At some point, you will need to use technology to communicate with your advisor. So why wait? From the advisor’s perspective, sound business practices are rooted in establishing long-term relationships built on long or short distance trust.
Life is unpredictable, and a financial advisor can help manage the economic changes by lessening the financial challenges. The key is establishing a reliable portfolio for you with the most growth and least risk possible.
Evolving Times
When you’re looking for a financial advisor, you may need to look beyond your local neighborhood. Advisors have been actively working with local and distant clients for years – regarded financial experts generally have clients scattered throughout the states, sometimes internationally. It’s essential to select the expert capable of walking you through the hurdles to keep your dream on track no matter what life throws at you.
In some cases, the client’s location may limit the selection of local financial advisors, making it necessary to work with a remote advisor. You may change residences or careers relocating to another city and find that working with an advisor remotely, works for your lifestyle. Look for one with the skill and knowledge to work with your situation and help guide you through the phases of earning investment returns.
The point is finding a good match for your life’s financial planning – location may be a secondary consideration. As a standard protocol, the client and the advisor establish communication methods and schedules.
Due Diligence
Before you choose a financial advisor, do your homework. Ask for references, talk with the current clients, and check out the governing financial agencies – you’re looking for disciplinary history.
All financial advisors within the U.S. operate according to the law governed by standards and regulatory guidelines. Don’t be afraid or intimidated to ask the advisor about the information you find.
Conclusion
The principle value is awareness – client needs change – markets shift. The right financial advisor will determine the amount of risk you can afford and navigate you through the events that impact your future. Plan for the unexpected, discuss the past year’s activities and make the necessary changes as you move forward. You can’t do it alone – you need an experienced and practiced professional - local or distant.
DIY Investors: 7 Reasons It’s Time to Hire an Advisor
Are you frustrated with the level of growth you experience when you attempt to invest on your own? Do you feel left out when your friends or coworkers talk about how much money they are making in the market while the value of your portfolio barely budges? If the answer is yes, it is probably a good time for you to take the next step in investing journey and ditch DIY investing by finally hiring a professional. A good financial advisor can bring your portfolio to a higher level.
7 Real Reasons Why You Need to Hire a Financial Advisor
A financial advisor can help you avoid the many pitfalls of DIY investing, including:
1. Removing the Urge to Trade on Emotions
You've probably become more than a little emotional when you think about your money. And when it comes to investing, listening to these emotions more often than not can end disastrously. It takes a particular type of person to be able to put aside feelings and make the right decision every time. A financial advisor is free of any emotional attachments and is able to choose whatever action is best for your wallet.
2. Failing to Employ a Disciplined Process
Hunches and tips rarely work out in the long run, but choosing and sticking to a proven investment strategy does. Your financial advisor has years of investment experience to use as a guide, and will never risk your money over a gut feeling or a rumor.
3. Avoiding Rebalancing a Portfolio
Selling a well-performing asset to buy another financial instrument which is underperforming is crazy, right? Well, not if you know what you are doing. Most DIY investors are reluctant to make such seemingly counter-productive moves, but the pros know when it makes sense to take the risk.
4. Putting All Your Eggs in One Basket
The old adage, ”Only invest in what you know," is good advice, but if you don't have experience with several types of financial assets, your portfolio probably isn't diverse enough to offer you very much stability. A good financial advisor will make sure that your investment strategy is well diversified to minimize down markets.
5. Selling When the Market Gets Scary
The market is down for the second week in a row, and the value of your portfolio is dropping like a stone. Are you going to have the guts to stick to with your investment system? Most DIY investors don't and wind up not only selling their investments for a loss but missing out on the very lucrative rebound. Financial advisors don't get scared by adverse market conditions, so, their clients are in the market to take advantage of the rebound.
6. Trying to Call Tops and Bottoms
You have heard it a thousand times, "Buy low, sell high," but attempting to call the tops and bottoms of a volatile market can cause you to lose out on a lot of profit. A professional investor knows that being afraid to pull the trigger on a trade because the fear of getting every cent from a trade is silly as long as you can catch the majority of the trend.
7. Sleepless Nights
Investing on your own is stressful. If the market is up, you are worried whether you should ride the wave as long as possible or take your profit now. But if the market is down, it is even worse. You are terrified your investments will never recover. Why do that to yourself? Do your due diligence, hire the best financial advisor you can, and rest easy.
Why make investing harder than it has to be? Take your life back and build a stronger portfolio by speaking with a financial advisor today.
Ask These Questions Before Hiring Your Next Advisor
When you hire a financial advisor, you are entering a long-term relationship with a person who will know almost everything about your financial life. It is nearly impossible to know who to trust with your money especially when some financial advisors are only looking to line their pockets rather than offer the best investment advice. Hence the importance to carefully vet potential candidates. To protect yourself and your money, here are some essential questions to ask your financial advisor before making your next move.
What is Your Investment Approach and Philosophy?
There is not one accepted approach or philosophy when it comes to investment. Different professionals follow different approaches and philosophies. Ask the financial advisor to describe their approach and philosophy in simple terms that you can easily understand. An investment philosophy can be described as a set of guiding principles underlying the process of choosing an investment in a given situation. While they might not disclose their personal information, they might be willing to share the strategies they use to succeed, and they might use the same approach for your portfolio.
Are You Fiduciary?
Their answer to this question helps you know whether the potential financial advisor has your best interest at heart or not. A fiduciary financial advisor places the interest of their client before theirs. If they are fiduciary, they freely disclose their fees and how they are compensated. They also disclose potential conflicts of interest that might influence a client’s decision to use their services. A non-fiduciary financial advisor, on the other hand, might receive a commission for selling an investment that is not in your best interest and they will not disclose it to you. If they do not give a straight yes or no answer to this question, take it as a sign something is not right.
How Much Do You Charge for Your Services?
It is important to know your costs upfront because it can greatly influence your decision. Some financial advisors get paid a commission for selling a product, others get paid a fee while others charge a percentage of the assets under management. The answer to this question not only helps you know how much the service will cost you, but it will also help you determine if they have a hidden incentive to sell you a product. Most people prefer an advisor receiving a fee rather than a commission because they are likely to act in the client’s best interest rather than a salesperson.
What Services Do You Offer?
Every person has different needs, what might work for another person might not work for you. The answer to this question will help you make sure that the advisor aligns with your needs. Some financial advisors are just investment advisors, and they will only offer you advice on your investments. Therefore, they would not be the right fit for you if you are looking for comprehensive financial planning around tax planning, insurance, retirement and estate planning. Go with a professional who offers services that suit your unique needs.
How Do You Measure Success?
A financial advisor should be in a position to measure their success based on how the plan is progressing compared to goals that their clients set up. They should share how your portfolio is performing against a benchmark that depends on the client's risk tolerance and their timeline. If the performance of your portfolio is slightly off track, they should be willing to work with you to come up with a strategy that will get it back on track.
By hiring a financial advisor, you are entrusting them with your money and the future represented by that money. Asking the above questions at the beginning of your relationship will help you decide if the potential advisor is one you want to work with.
3 Things to Know About a Digital Advisor
Before you start looking around for a digital financial advisor, you need to ask yourself this question: What type of financial help are you looking for? If you’re looking for a full array of services—investment advice, retirement planning, etc.—you’re probably after a qualified human with financial planning credentials.
On the other hand, if you may only need help in getting started and staying on track. In that case your needs could be met through computer-based services. Those services typically carry low fees — or are free with some online banking services like Bank of America or USAA. Your options for those online digital advisors include so-called robo-advisors or a hybrid combination of humans standing by to assist when the automated advisors leave you with unanswered questions.
The Difference Between a Robo-advisor and a Digital Financial Advisor
A robo-advisor is online and uses computer algorithms to model portfolios.1 The client provides the input of personal data, investment goals and risk tolerance, etc. Don’t look for lots of human interaction with a robo-advisor, which mainly focuses on the allocation of your investments, rather than financial planning.
A digital advisor is a combination of a robo-advisor backed up by a qualified financial planner.2 The digital advisor adds the human element to the convenience of immediate access to your financial information.
Which one you should choose depends on a full understanding of the services each offers. Robo-advisors come with low-fee investment planning. Digital advisors offer a combination of computerized financial services with the ability to talk to a qualified human.
So, for the purposes of this discussion, let’s consider that you are seeking a digital financial advisor, who provides online advice and assistance as well as automated features for a more do-it-yourself approach to financial planning.
3 Questions You Need to Ask a Digital Financial Advisor
1. When I have set up your accounts online, can I access all of them from one online platform?
That access should include customization through the use of interactive spending reports as well as budget assistance. If you are a seasoned investor, you will want to see the total value of your investors at any given time. As an independent do-it-yourself type, you might want to conduct your own trading and investment activity with the digital financial advisor looking over your shoulder and steering you clear of tax or regulatory pitfalls.
2. Is your financial tracking technology easy to use and intuitive?
This could be a struggle point at times when working with some digital financial advisors. It’s all about integrating user-friendly software with the end-user experience. The ideal solution is for your digital financial advisor to have a single sign-in platform with all the tools and accounts, investments, etc. in one place. If you have to leave the platform to manage a piece of your investment elsewhere, you are buying into a potentially difficult user interface.
3. Do you have the technology that brings your financial situation under a single umbrella?
As your financial life becomes more complex, your digital financial service must be able to gather all your data and bring it together in a way that helps you manage your finances. For example, what should you do when your 401(k) is maxed out? What are the tax consequences of investing in an annuity?
Above all, your data must be secure and presented to you in a format that you use and understand immediately.
As your financial life gets more complicated, digital financial services providers can tell you, “There’s an app for that!” The trick is to find the ideal solution that integrates everything you need and a digital financial advisor who can integrate all that automation in a way that is best suited for you now and in your financial future.
What’s the Difference Between a Financial Planner, Financial Advisor and Investment Advisor?
Once you've decided it’s time to get some professional financial help, you may be asking yourself: “Which type of financial professional is best for me?” From a financial advisor to an investment advisor to a financial planner, it’s helpful to know the differences between each category of financial experts before committing to a long-term engagement. According to the CFP Board, “consumer use of financial advisors has increased significantly in the last five years,” going up approximately 10 percent in the span of just five years.1
When advisors were surveyed about the benefits of cash flow management and budgeting, nearly 100 percent of them stated that their clients became more confident and secure about their financial futures after utilizing the service.2 However, “consumer use” does not necessarily mean every age group of consumers is jumping on the bandwagon. The Society of Actuaries found that “only 52 percent of pre-retirees and 44 percent of retirees consult a financial planner or advisor.”3 Before you make a final decision, we’ve rounded up some of the key differentiators between each group so you can sign your contract with confidence.
Term #1: Financial Advisor
The most used term, a financial advisor is someone who helps you with different aspects of your financial life. This might include planning for and transitioning to retirement, investment advice, life insurance, 401(k) plans, IRAs, budgeting and more. Every financial advisor is different in what specific areas they specialize in and what services they provide, so if you are looking for help in one particular area, it is always best to ask.
Financial advisors can be compensated in a variety of ways - they can be commissioned- based, fee-only, or charge a percentage based on your total AUM (assets under management).
Term #2: Investment Advisor
An investment advisor is a professional who focuses on just that - your investments. An investment advisor will manage your portfolio with the goal to get the highest rate of return that you can over the long run. Before they begin designing your portfolio, investment advisors should evaluate your current financial picture, as well as determine your optimal risk tolerance, which may involve you filling out a questionnaire.
After discussing your needs and goals with your advisor, they typically will then present an investment strategy tailored according to the unique aspects of your life. Some investment advisors actually manage your money and do the investing for you, other simple "advise" on what you should do, leaving you to implement the strategies on your own.
Term #3: Financial Planner
With more money comes more responsibility, and financial planners’ duties are catered specifically to those who have a desire for a holistic approach to organizing and managing their finances. These professionals not only develop a plan for your financial independence, they will actively partner with you to help you do the work, including providing ongoing consultations and managing your investments, to ensure that you achieve your financial goals.
Keep in mind, many firms may categorize their own business under more than one of these labels (they might say they are a "financial advisor" as well as a "wealth advisor". Of course, the best course of action is always to contact any financial professional you are interested in working with directly and learn more about their business model and what services they provide to their clients.
5 Essentials to Share with Your Financial Planner
Your financial advisor is an integral part of your team to help you manage your wealth and grow your future. Unfortunately, you may not be sharing with them everything that you should be. Whether you are not communicating things because you feel they are unimportant or are a private person who wishes to keep certain information to themselves, not sharing what you need to with your financial advisor could result in problems with your financial future. Below are five things that you should always share with your advisor.
1. What Your Goals Are
You can have all types of goals in your life from charitable giving, to buying a vacation home, to planning for retirement. Whether these goals involve finances or not, it is important that your financial advisor knows them, so that they can provide you with the best advice on how to achieve these goals. You may be concerned about caring for a family member or protecting your family against possible interruptions in income. While these may fall outside of what is considered traditional goals, your advisor may find certain solutions that can help these goals be obtained as well.
2. Your Honest Feelings About Your Financial Situation
You may be under the impression that being confident and under control at all times is necessary to portray strength. But putting on a bravado that you feel everything is ok when you are panicking inside will not improve your situation, and could make it worse. If an investment makes you nervous, or you have a financial concern that has been worrying you, your financial advisor is there to help you work through it. They also can help explain occurrences in the market that can put your mind at ease. Remember it is their job to guide you through your wealth journey and handle any concerns that may arise.
3. Changes in Your Job or Other Income
Whether it is a big change such as losing a job or switching careers, or even small changes, such as adjustments to your benefits, you should alert your financial advisor right away. You might need to adjust your retirement allotment to account for other possible expenses, or need additional insurance coverages to fill in the gaps for lowered benefits. If you embark on a side job, you should also consult with them to determine the best ways for tax planning, and possible investment opportunities for any surplus of income.
4. Major Changes to Your Personal Life
There are some aspects of your personal life that are prudent to share with your advisor. Such things as separations or impending divorces can greatly affect your finances as well as deciding to get married or having children. Your advisor can help you plan for the loss of assets in your divorce, help you invest properly to plan for children's college education or advise you on changes to your life insurance and other assets to protect your family.
5. Data or Identity Breaches
In the event your personal information has been comprised, or you suspect your identity has been used by someone else, you should alert your financial advisor immediately, even if it is as simple as you have lost a credit card. Your financial advisor will have the ability to place additional restrictions on your account and provide added security to protect your financial information and wealth. Your advisor can also provide you with advice on how to protect yourself from future breaches.
You and your financial advisor will both have the same goal in mind, which is making you more money, growing your wealth, and protecting it. Remember to treat your advisor as part of your team and trust them with all the changes in your life can affect your financial future.
Why You Should Care About the Fiduciary Rule
When you’re deciding on a financial advisor to guide you on decisions regarding retirement, investments, life insurance, estate planning and the like, you should have a lot of questions prepared. One of the most important questions to ask is whether the advisor is a fiduciary. You might assume that a financial advisor always has the best interests of the client at heart. That, unfortunately, is not always true, and it is at the heart of the fiduciary rule.
What is a Fiduciary?
When a person or organization acts as a fiduciary, they are ethically bound to act in the best interests of the party whose assets they are managing. Such assets are managed to benefit their owner, not for the profit of the manager. There should also be no conflict of interest between the fiduciary and the owner of the managed assets. Fee-based investment advisors are regulated either by the state or the Securities and Exchange Commission (SEC). A fiduciary has the duty of “loyalty and care,” which is another way of stating that the client’s interests are always put above their own.
Broker-dealers, on the other hand, operate differently. They are sales representatives, and while they must make “suitable” recommendations to clients, their primary loyalty is to the brokerage for which they work, not necessarily the client. They are also paid by commission, rather than the flat fee charged by fiduciaries. While there are plenty of honest broker-dealers in the business, there are also those who will steer clients toward high commission offerings rather than those charging a low or no commission. For example, a broker-dealer could sell a client a load mutual fund, which charges a commission, while a similar no-load mutual fund may have an even better track record. An advisor acting as a fiduciary cannot do that. The Council of Economic Advisors estimated $17 billion annually is lost by investors overpaying for such investment products.
What is the Fiduciary Rule?
A fiduciary rule regarding full transparency has long been a practice of many financial planners and advisors, and in 2015 the Obama administration wanted to initiate investor reform via such a regulation. As proposed, the fiduciary rule would require all financial firms to act as fiduciaries when dealing with clients’ retirement accounts. Firms that failed to so could face class-action lawsuits.
The U.S. Department of Labor (DOL) was supposed to begin phasing in the rule as of April 2017, but the Trump administration had issued a memorandum in February 2017 which delayed the rule’s implementation by six months. In June 2018, the U.S. Fifth Circuit Court of Appeals upheld an earlier decision to strike down the DOL’s fiduciary rule. The court’s majority found that the DOL exceeded its authority when promulgating the rule.
While the fiduciary rule is dead on the federal level for now, that does not mean it isn’t vitally important for consumers. You do not want to settle for less when searching for a financial advisor.
Fiduciary vs. Salesperson
Many people think their financial advisors are fiduciaries, but that’s often not the case. As noted, some financial advisors are essentially salespeople, not fiduciaries, and are more interested in selling a product than necessarily looking out for the client’s best interest. It’s one thing if a client understands a particular advisor is basically a salesperson, but if they don’t, the financial planner can take advantage of them. The fiduciary rule would have forced salespeople to act as fiduciaries, and that was not a popular stance in the profession.
Asking the Fiduciary Question
When interviewing a financial advisor, inquiring whether they are a fiduciary should prove one of the initial questions. If the advisor responds affirmatively, ask them to put it in writing. You should also ask how they are paid since the answer will tell you whether or not they are a fiduciary. In many cases, you are entrusting your life savings to this advisor. You must ensure they are always acting in your best interest.
Should Your Advisor Live in Your Area?
In early 2020, governments around the globe took drastic measures to slow the spread of the pandemic. As a result, we saw a major shift in the way we work, interact with others and go about our daily lives. While working with an advisor virtually is nothing new, the relevance of virtual advising has increased significantly amidst the global pandemic.
Money is one of the most personal and important aspects of your life, meaning you may feel more comfortable trusting someone you can get to know in-person. But with today’s technology and ongoing need to continue social distancing, now’s the perfect time to consider whether working with a local advisor is really a necessity or not. Instead of physical location, it may be more prudent to consider other factors, such as designations and certifications, years of experience, areas of expertise and more.
As you consider whether or not to work with someone in your area or beyond, ask yourself the following questions.
Am I Comfortable Utilizing Technology?
Virtual advisors will likely want to meet with you face-to-face over video chat, whether through Skype, Zoom, Facetime or other video conferencing tools. They’ll likely want to share their screen with you, go over important documents and even have you virtually sign paperwork. When you’re not meeting virtually face-to-face, you’ll likely have access to view your portfolio and other financial information online.
It’s likely your advisor will work with you to try to make your experience as comfortable as possible. They can provide instructions for using their tools and answer any questions you may have to help ease your concerns. But if you’re still uncomfortable with building a technology-heavy relationship with your advisor, working with someone local may be better.
What Services Do I Need?
The type of services you’re looking for from an advisor may shape the type of relationship you’re looking to build. If you’d prefer to remain fairly hands-off or you have a demanding schedule, working together virtually may be much more preferred than meeting in-person during office hours. On the other hand, if you prefer to work together closely with your advisor, drop by their office to ask a question or check-in often, you may be more comfortable working with an advisor within driving distance.
Do I Need an Advisor With Certain Expertise?
Another important consideration is experience and credentials. If you’re in need of someone with a specific niche (such as handling student loan debt for medical professionals), there may not be an advisor who specializes in this in your area. If that’s the case, it may be worth working with someone virtually who can provide the expertise you’re looking for.
In a world that’s gone virtual, working with an advisor simply because they are local is no longer a necessity. The technology to build a well-developed relationship virtually is there, and it’s being utilized by thousands of advisors, brokers and agents around the globe. The important thing is to determine what you’re comfortable doing when it comes to your money and finding a partner who will be compatible and capable of helping you reach your goals.
Common Myths About Working with an Advisor
Myths about working with a financial advisor abound, maybe you've even heard a few; "I don't need one," "they're for the wealthy," "there are lots of hidden fees." The truth is that financial education around saving and investing money is for everyone. And even though everyone has different perceptions and expectations about a financial advisor’s purpose, the goal remains the same: getting your money to work for you.
The sooner you start, the better. Developing good financial habits now, helps to prevent major catastrophes later.
- Wealthy is a high bank balance. At the end of 2013, American 401(k) balances averaged over $100,000. The median contributions during the same time were slightly more than $30,000.1
- I can’t afford a financial advisor. Reality is you can’t afford to be without one. An advisor helps manage your finances, including student loans, credit cards, retirement savings or real estate investments.
- An advisor guarantees returns. They don’t. They put you in a better position for making good financial decisions for short- and long-term planning.
- They provide short-cuts to making money. Not true, although market predictions exist, no one knows for sure. Advisors can get you closer to your goal, but you need to understand the risks and measurements of time required.
- Hidden fees. Ask for complete details on all-in fees for each consultation or transaction. This is your money, your future — don’t be shy about it. Choose wisely and ask questions about the forms of payment.
- You could do it yourself cheaper. Everyone at some point needs professional help. There’s more to financial planning than making a deposit. It’s about knowing how to manage the funds for growth.
- Advisors are self-motivated. Not always true, a successful advisor succeeds when you reach your goal. Their goal is to educate you on the market choices and how to avoid a financial crisis.
- Only interested in bank balances. This is far from the truth, since most Americans hold assets that continue to outperform the stock market. Your home’s equity, retirement or savings combined may exceed the average bank balance.
- Expensive for basic principles and advice. Individual planning is unique to your lifestyle and your situation could have complications. Good advice is not free.
- Wealth happens overnight. Working with a long-term financial advisor assures a financially planned future.
- You can always start later. It’s never too late to manage finances, but it helps to start early.
- You’ll go broke when the market swings. Not necessarily. Focus on the things you can control and keep an eye on the long-term strategy.
- Chasing the next big investment. Developing a financial portfolio is about building a comfortable long-term financial plan. It involves a realistic investment goal.
- Limited budgets need not apply. Talk with an advisor and be honest about the budget. There may be a plan to get you started.
- You got the advisor – now you can kick back. Wrong. The key to building a secure future includes budgeting and learning. It involves using money tools like insurance policies, and estate planning.
- 401 contributions are enough. Without financial planning social security and 401(k) balances may not keep up with the cost of living.
- No such thing as future security. It’s a scary, but this is about managing circumstances and preparing for life’s transition.
- You don’t need to know what’s happening. If your advisor doesn’t keep you in the loop always it’s time to change. You need to understand the whole picture, complete with details of what works or why it doesn’t.
- I have no disposable cash. You can learn to spend less and smarter to accomplish your future goal. Regular meetings are review points for adjusting the plan.
- They organize my future not me. You must take part in managing your current finances and planning your future.
Long-term planning and good financial decisions with the help of a professional advisor is a managed future. Understanding the basics of the financial advice will help to avoid overwhelming mistakes brought on by these myths.