I have heard from quite a few folks, and honestly for a lot of my career saw this first-hand — the one constant with their financial adviser at their large firm is change. Many of my clients and friends have expressed that this seems to happen on almost an annual basis.
I am on my 3rd rep in 4 years at [insert big broker dealer here].”
This can be frustrating. You must get to know a new person each time this happens. And, the planning process can become cumbersome, as you are never able to get past the introductory portion of a planning relationship.
While this presents an opportunity to reassess who you work with, I felt it was prudent to go through a few other things to consider if you are looking to find a more long-term partner when it comes to your overall financial well-being. You deserve to have someone consistently work with you on your family’s financial independence.
Consider these factors:
Weak Performance/Risk Misaligned
Your portfolio should reflect your overall situation and the performance should align with the amount of risk taken. I cannot count how many times I have uttered the phrase, “success in investing is 90% comfort”. What this means is, if your portfolio aligns with your plan and it performs as expected or better, you will be comfortable. Understanding what you own and why you own it is essential. A consistently underperforming portfolio can cause both a plan to struggle and cause you distress in your retirement years. An adviser who is willing to explain your options on your terms so you can make an informed decision together allows you to feel empowered when your portfolio does well — and makes the dips more bearable.
To get better performance, work with an adviser who has a proven process for creating 100% fully customized portfolios. Your situation and your risk tolerance are unique to you — your portfolio should reflect that to ensure you achieve all your lifestyle and financial dreams and goals.
Learn about Diazo’s process today. Schedule a free consultation with us today.
Haven’t heard from your financial adviser in months? That may make you wonder what exactly you are paying for. Communication regarding your financial well-being is critical. Regular and consistent discussions help you and your plan stay on track.
Your communication should be on your terms. If you prefer email, your adviser should be emailing you. If you prefer to be called, they should call you. If you like getting paper copies of statements and letters in the mail, meeting in person, doing it all online – your adviser should be able to communicate with you in ways that you prefer.
If it feels like your financial adviser has ‘ghosted’ you, you may feel unimportant and unvalued. That could indicate a suitable time to make a switch.
**Related: Your Adviser Does Not Listen
Even more important on the communication side of things is when you have questions, concerns, or even just want to be educated on a subject. You want explanations.
It is your money. You have every right to get the service you need, and how you want it.
Some advisers may just keep plowing ahead, perhaps because they feel “know better.” This can create an adversarial relationship. Money talks in general can be stressful enough. The relationship you have with your adviser should be an open and honest partnership.
We are here to listen. Schedule a free consultation with us today.
Your Situation Changes, Your Plan Does Not
The one constant in life is change. Therefore, the things that are important to you and drive your financial life could be vastly different 5, 10, or 20 years from now. Your financial adviser should understand that and be able to adapt your plan to your new reality as it occurs.
Some examples of changes I have seen in my years working with high-net-worth investors are:
- a sudden windfall from an inheritance,
- a costly medical diagnosis, or
- caring for an aging relative.
All of these will require your plan to be updated.
Note: If your adviser has not updated your plan in five years…you need a new adviser no matter what! We address every client’s plan every quarter to provide the opportunity to reassess.
And, of course, if a client needs to change in between, we are a phone call away.
Unreasonably High Costs and Fees
Industry average for a financial adviser’s charge is typically around 1% to manage your liquid investment assets. However, there are many other costs and fees they may or may not tell you about (or even know about!). In some cases, this can eat away at your investment performance, and in turn, your ability to reach your goals.
This is definitely something to investigate, as depending on the size of your portfolio, you could be losing tens or hundreds of thousands of dollars per year from these costs.
Lack of Transparency
Do you have 24/7 access to all your statements? What about your financial plan? The updates for your goals? How about consistent performance reports? Do you get clear explanations to your questions? Does your adviser seem annoyed at any small questions you have a right to ask? Or skim over details when discussing your investments?
An adviser who cannot be up front about what is going on with your money is an adviser who should not be managing your money.
Transparency is crucial to building a trusting relationship with your wealth management team. The answers to your questions help you to make better financial decisions. Your decisions are only as good as the information you have.
If you are looking for a transparent, thoughtful adviser, Diazo Wealth is ready to speak with you about your financial goals.
We will answer any (and all) questions you may have about your plan — to your satisfaction. If the problem has a dollar sign attached to it, we can most likely find an answer.
Only Calls You to Change/Talk About New Products
If you only hear from your financial adviser when they want to get your approval for buying or selling investments, this is a huge red flag, for many reasons.
- Do they make commission based on these trades?
- Even if they are not commissioned, this kind of behavior tends to be reckless. Communication that occurs only when your adviser needs something likely does not serve your long-term financial goals.
- Most importantly, if your financial adviser is constantly jumping from investment to investment on a short-term basis, you are paying higher capital gains taxes (at the time of this writing – 37% vs 20%)!
An adviser always going after whatever new funds or equities they deem (in their opinion) as the ‘hot’ new thing, is not one you want in charge of protecting your wealth. This approach of active investing almost never outperforms the market. Advisers like Diazo Wealth Group utilize a strategic approach to investing, with securing your current wealth and making it last for generations at the forefront of our method.
Lack of Trust
Trust is the foundation that all relationships are built upon — the one with your financial adviser is no different. When finding the person guiding your financial goals, it should be someone you can see working with for decades; after all, securing wealth and making financial decisions is an ongoing, often multi-generational process. That said, if you lose trust in your adviser for any reason, it can be difficult to repair — and may present a good time to see what other options are out there.
Now, all of this does not mean that we think Diazo will be the perfect fit for every person seeking financial advice. There are a lot of things to consider when choosing the person to work with in securing your legacy. Schedule a free consultation with us today and see if we are the right partner for you.