One of the problems that I have experienced with financial advisers is their quickness to judge me and failure to understand my point of view. When evaluating an adviser, I look for someone who offers insights on complex financial problems. I don’t mind being pitched an off-the-shelf product but want to hear why it’s ideal for my unique circumstances. I shy away from those who seem to force an ill-fitting solution as appropriate for every situation (and demean me if I disagree).
To test the local advisers’ skills and integrity, I worked with my initial contact to execute the rollover of a 401(k) plan to an IRA; and then make investment recommendations that I either approved or rejected. Based on recent successes, the adviser seemed confident of recommended investments and their superiority to other choices.
I didn’t mention to the sales rep that I had a significant amount of money in an IRA in a separate account, possibly available for management for the right person. Again, my goal was to evaluate the adviser’s integrity and knowledge and then possibly expand our relationship.
Initially, I was pleased with the service. The rollover was completed and funds invested. But when another adviser replaced my initial contact, a new and improved recommendation was made. I was happy to test this new person’s investment savvy. But later I felt that the change in investments may have been contrived just to generate a sale. The investment did not seem superior and the adviser did not maintain the relationship.
A few readings have compelled me to clarify my position on financial advisers plus tell cautionary stories. My experiences may help others understand what they may want to consider when engaging a professional to provide guidance on financial matters.
The impetus for this series was the #YourTurnChallenge on Seth Godin’s blog. The challenge is to write one post every day for seven days, starting today. After some contemplation (and despite a full schedule), I decided to accept this challenge. I thought it would be enlightening to readers and cathartic for me to write about my experiences with financial advisers.
When I started investing, I was concerned about picking the right stocks, mutual funds, and ETFs; matching any financial goals with the right asset allocation; and holding down investment fees. Those issues are important. But I also have learned not to overlook the impact of taxes on investment returns. That said, I can’t be so concerned about taxes that I’m paralyzed from making an investment move. But it helps to consider how investment decisions impact tax liability, both in the present and for the future.