Good Financial Advice
 

 
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  Are You Getting Good Financial Advice?
  Donít Just Look At Numbers; Whatís Your Gut Telling You?

 
Itís not hard to find advice on how to manage your money these days. You can find plenty of it on the Internet, in books, magazines and newspapers, from well-meaning friends and relatives, and of course, from professional advisors.

But while finding financial guidance is easy, judging the worth of it can be a much tougher task. Even hiring a professional adviser is no guarantee youíll get great advice. If youíre paying someone for a personalized plan, though, you especially want to make sure youíre getting your moneyís worth.

The true test is whether you reach your goals. But if your goal is decades away Ė retirement, for example Ė you donít want to wait until age 65 to see if you made the right moves.

I would encourage people to look at their overall situation no less than annually and assess the quality of the service theyíre getting.

So what things should you look at? Ask yourself these questions when gauging money advice:

What are the numbers? The most obvious way to judge investment advice is by performance. But make sure your expectations are realistic.

If you have a diversified portfolio, youíre going to outperform the worst asset class but under perform the best. With that in mind, donít look at just your pure rate of return. You donít have to be in the yearís highest flying mutual funds and stocks to succeed.

Instead, you and your advisor should quantify your goals when creating your financial plan.

That plan should include periodic, realistic mileposts to check your progress against. If your net worth isnít growing as fast as youíd forecast, examine why. Maybe it was just a down year in the market. Or maybe youíve been too cautions with your investments and need to make a change.

What does your gut say? Can you stomach the investment risk theyíre taking?

The real key is to remain invested.

Some discomfort is normal. Youíre not going to gain anything without taking risks. But if youíre so nervous about the risk youíre taking that you cannot stay invested, you need to talk to your advisor. If youíre always buying at the top and selling at the bottom, you wonít build wealth.

You also should pay attention if your gut feeling is telling you that your advisor isnít being honest with you.

If it doesnít feel right, it probably isnít. If your advisor doesnít listen to you, doesnít return your phone calls, does some kind of trading in your account that you didnít know about, you need to raise your hand and say something.

   
 Have you been following the advice?
  If you havenít put your plan into practice, whatís stopping you? If it is because the suggestions are too complex, and you donít understand them or they make you uncomfortable, talk to your advisor.

Why pay for counsel youíre not going to use? If your planner wonít listen, you may need to hire someone else.

...  
 Is the advice clear to you?
  I really believe that the way an advisor speaks to a client is very important. Sometimes people who arenít confident about something use lingo to make themselves appear to be an expert.

Also, itís crucial for you to understand the money moves you are making Ė and why youíre making them.

We need to be responsible for our financial futures. If you abdicate responsibility and say ĎSo-and-so will take care of ití you may find out when it is too late that so-and-so wasnít taking care of it.

   
 Is your advisor a good listener?
  Responsiveness is a key thing. Many people have questions. Are you getting good answers to those questions?

I would be concerned if an accountant said Ďdonít worry about those details. Just trust me.í People are entitled to understand what they are doing and why.

You should feel comfortable enough with your advisor to ask anything.

Most of us donít want to embarrass ourselves or admit we donít understand something, but itís very important to feel OK saying ĎI donít have a clue what youíre talking about.

 
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