Should you fire your investment professional?Written by Nolan Baker Mark Clair | | email@example.com
You have just opened your investment statement and you get the feeling that you just got punched in the stomach again. You feel you did your part, stayed the course, but now you are at a point where you want to consider a change. Should you change your investment professional?
That is the question I posed to about 50 local residents who attended an educational financial workshop. Now to be fair, this group of people signed up to attend a financial workshop, so we have to assume they were interested in change already. The interesting part is the answer to that question. Here’s what they said:
“It’s my professional’s job to keep up with the ever-changing rules and investment choices, and he should keep me informed. I would switch advisers if he did not stay up-to-date.”
“My adviser seems more concerned with her own money, not mine. That was when I was done with her.”
“If our investments were doing worse than the market or if the pro was too unavailable or seemed irresponsible or dishonest, I would change.”
At the end of the day, it’s your money and only you can decide when and why you should make a change. But you may feel like many of the people from the workshop. If you are considering a change, here are some things to consider beforehand.
Have you talked with your current investment professional about your concerns? Communication is a two-way street, and it’s important to contact your professional and discuss your situation. Your investment professional may not realize you are concerned. Plus, he or she may be able to review the strategies with your current account to address today’s economic uncertainty. Or your current plan could be adjusted.
Your professional should take a proactive approach staying in contact with you, but if you have difficulty getting a return phone call or if you feel that you just get pawned off on someone else, it may be time for a change. It’s that old saying: “You feel like a small fish in a big pond.”
There is no such thing as a one-size-fits-all investment in our opinion. Investment professionals should take time to understand your goals, time frame, risk level and your liquidity needs before they make recommendations. A plan can be anything from a one-page summary of recommendations to a detailed financial plan. Either way, there should be some analysis done and a plan created before you make a change.
Poor performance could be another reason to consider a change. Don’t just judge your performance based upon your statement; compare your performance to others. You may be upset if your account is down 10 percent, but if others with a similar strategy are down 20 percent, things may not be as bad as they seem. On the other side, if you are losing a substantial amount of money, it may be important to stop the bleeding before you go beyond the point of no return. For example, a 50 percent loss will take a 100 percent return just to break even.
Changing an investment professional can be a scary thing to do, but, in the end if you have lost confidence or have lost trust, a change may be just what you need.
For more information about The Retirement Guys, tune in every Saturday at noon on 1230 WCWA and every Sunday at 11 a.m. on 1370 WSPD or visit www.retirementguysradio.com. Securities are offered through NEXT Financial Group Inc., Member FINRA / SIPC. 1700 Woodlands Drive, Suite 100, Maumee, OH 43537.