Being Smart With $$ -- Take Some Chips Off the Table

Are you gambling and leaving those Chips on the Table? Doubling down and hoping for Blackjack?  Or are you happy to be a winner, shoving some Chips in your pocket and limiting your risk?  If you have a financial plan, you should have a target portfolio which includes a certain percentage of your money in stocks.  In the last year, U.S. stocks are up almost 23% while bond returns are barely positive.  If you haven’t done a portfolio review lately, chances are good that your actual portfolio and target portfolio no longer match up.  Time to act and remember that your retirement fund should not be brought to the casino.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com

Being smart with $$ - Hire a JERK for your investment advisor

Choose a JERK for your investment advisor.

If you are choosing between two investment advisors where one is a jerk but looks at your whole financial picture before deciding what's best for you, compared to a "nice guy" that simply offers you a couple of high-commission investment choices, go with the jerk.

If one investment advisor is a jerk but seeks the best solutions for your needs while the other is a "nice guy" but seeks the best options for his own paycheck, go with the jerk.

I have known many cases of people needing financial help who were ready to sign on with a "nice guy". However, in many cases that "nice guy" did little to understand their client's needs while doing a lot to pay for their next car from the fees and commissions they were about to charge. Ask about fees and ask about investment alternatives and why recommendations offered are best for your unique circumstances. And if the jerk gives you the right answers, by all means, sign up with the jerk.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com

Being smart with $$ - Ask a Prospective Financial Advisor:

Ask your prospective financial advisor:

How much money will you make in cash commission, now, if I select this product?  And how much will you make later, in any sort of ongoing or trailing commissions?

Are you earning more from selling me this product than you might from putting me in a similar product?

Is your company…running any contests that might lead to you getting…a free trip if I buy this product?  

All of these are questions posed in the Feb 10, 2017 NY Times article “The 21 Questions You’re Going to Need to Ask About Investment Fees.”  Other questions involve the myriad of complicated fees embedded in many investment products. 

The issue is whether your advisor is considering your best interests or their own when selecting investments for you.  The math may surprise you on how costly it can be to lose a few percentage points per year on fees and commissions.  Be careful selecting an investment advisor and probe as to whether their interests seem to be aligned with your own.  A new “fiduciary rule” was supposed to go into effect in April that would help protect investors but the new administration is delaying the start date.  So you need to protect yourselves by asking lots of questions!

- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com