Episode #6: Investor Beware

Today’s Prep:

As you search for a financial advisor, you need to beware of certain characteristics. Some traits could raise red flags toward an advisor.

(Click the featured times below to jump forward in the episode)

Equipping Points:

[1:06] – Generalists Versus Specialists. 

  • If an advisor tells you they’ll work with anyone, it could be a red flag. Think of it this way. When you’re a child, you visit a pediatrician, but as you age, you start seeing certain specialists based on your needs. Your financial health functions similarly. While there are several types of advisors out there, you basically can break your investing life into two categories: wealth accumulation and wealth distribution. Both require a certain type of advisor, so if your advisor says they can work with anyone, they might not actually be particularly good in any one category. When it comes to your retirement, work with an advisor who specializes specifically in retirement planning.

[3:56] – Beware Of DIY. 

  • Beware of a do-it-yourself approach to retirement planning. While it might be easy for you to build wealth during the accumulation phase of your career, you really need to hire a specialist during the distribution phase. Your advisor adds value as they help you to focus on tax-planning, long-term care planning, legacy planning, Social Security planning, and other elements of financial planning you’re not accustomed to handling. Much like a coach, they know the correct strategies to employ in your portfolio to help you succeed in retirement. Retirement is more than a collection of investments. It’s knowing how to work all of your assets and different sources of income toward meeting your needs once you step out of the office for good.

[7:08] – Your Finances Aren’t Always Pretty.

  • Beware of the advisor who always tells you what you want to hear. You’re finances aren’t always in rosy condition. Sometimes, you need tough love and straight talk. If your advisor is always giving you good news, they’re probably doing your portfolio a disservice. Your finances are going to run into trouble, and as they do you need someone who will be honest with you. You also need an advisor with the experience necessary to help your situation. Work with a fiduciary who can help you alleviate your tax burden, manage your wealth appropriately, and help you work through the financial conundrums you’re bound to face along the way.

Other Preparation:

  • [9:13] – Take some winnings off the table.

Today’s Takeaway:

More From Eric:

The host: Eric Peterson - Contact - Call: (515) 226-1500

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