Big Mistakes People Make When Hiring Advisers
Big Mistakes People Make When Hiring Advisers
Cost is an object, but it's not THE object:
The same goes for payment style, the various methods of working and compensating an adviser discussed in the last chapter.
Cheap advice is, well, cheaper, but not necessarily better, appropriate, or the elusive "right for you." If you save a few hundred dollars in fees to the adviser, but wind up with someone who is incompetent and whose decisions cost you thousands of dollars down the line, you did not get a bargain. Likewise, if you go for more expensive counsel but can't get the quality of service you desire, you'll be unhappy no matter how respected the adviser and how sound his advice.
Look at what you are getting for your money and determine a reasonable balance between services, costs, and method of compensation.
If all you are looking to do is add a mutual fund or two that you can throw some money into every month and hold for years, you shouldn't be paying a big fat fee for an overall asset-allocation plan. But if you require a needs analysis and a plan of action to get you from where you are now to your financial goals, you don't necessarily want to make your lifetime decision based on "I hate paying commissions" or "This planner charges less by the hour."
Expecting credentials and designations to make an adviser "good":
There are so many professional credentials and designations out there for financial advisers that you could drown in a sea of alphabet soup.
That said, every credential is different. Some are worthwhile, some are bogus. Within every credential, there are advisers who are good, and others who stink
The real question about credentials boils down to "Does this adviser have the expertise I need?"
Credentials help to answer that but, on their own, they say nothing about the individual's personality, manner, disposition, or ability to inspire your "emotional discipline."
Your search for advisers is about finding "the right person," not "the person with the right credential," and there is a big difference. You don't just want a skilled doctor, you want one with the right bedside manner. I know plenty of Certified Financial Planners whose personal style is so strange, different, or off-putting that the only way I could work with them personally is if I was in a coma.
Hire a person, not a credential; when times get tough, it's going to be the human being --and not the letters after her name -- that you rely on.
Setting expectations and viewing results based entirely on returns:
People hire advisers because they need help and want to get their finances in order. They fire advisers because they don't earn a "big enough" return.
It's a recipe for disaster.
If you are an average investor, you're looking for a partner, someone who will help you develop strategies that enable you to reach your long-term goals. In most cases, achieving that success requires participating in stock market gains during good times without losing your shirt when the market sours. For most consumers, it's more about avoiding surprises and losses than it is about getting rich quick.
And yet, when push comes to shove, advisers get dumped because they "failed to beat the market" each and every year.
What most people want from their adviser is long-term performance that allows them to ride the market rollercoaster and get off at the end with a big smile on their face.
Alas, too many financial-services customers want to jump off mid-ride. Despite what they said when they signed up to work with an adviser, they want to change the criteria for judging their counselor mid-stream, typically at just the wrong moment.
Letting the adviser control everything:
You may be looking for hired guns to help with your finances, but there is one key phrase to remember in all this: "It's my money."
Advisers are partners in your financial success, but you have the most at stake and, therefore, you run the show. With that in mind, you are entitled from the very beginning of the relationship to ask about anything you want, from why a recommendation was made to why something cost more than you expected.
You need to be treated like "the boss," too. Some advisers treat customers shabbily when the client doesn't take their advice or make a suggested move. That reaction is an instant warning sign that the adviser respects his position more than yours and may have put his interests first, by Chuck Jaffe, MarketWatch.
Some Crucial Facts About Hiring Private Detectives Retail Store Hiring How Applicant Tracking System Can Decrease Hiring Cost Importance Of Hiring Import Export Consultant Cost Saving Benefits By Hiring A Virtual Assistant IRS Hiring Agents in Abusive Transactions Group Benefits for Hiring Miami Limo Hiring A Nanny? Van Rental - Top 4 Things To Consider While Hiring A Van Mass Hiring Is A Usual Sight Hiring A Skip : A Short Guide Some Benefits of Hiring an Experienced Private Tutor If Employers Could Be Sure Every Hire Would Add to the Bottom Line, They'd Be Hiring Machines