Time to Reassess Your Financial Advisor? 4 Warning Signs to Watch For

The beginning of the year is a good time to closely review your investment plan and make an assessment of how well it’s working for your family. Are you on track to meet your goals? Is your advisor managing your investment portfolio pursuant to your needs (producing sufficient income and/or growth)? And above all, are you happy with the service?

A good rule of thumb in our opinion is that if you think your overall experience can be better, then it should be better. There’s really no need to ‘settle’ when it comes to choosing a financial advisor you can trust and who meets your expectations. You’ve worked hard to build your nest egg, and you deserve an advisor who can help you grow it and meet your retirement income needs over time. Here are four warnings signs that your current advisor may not be that person.

1. Lack of—or Insufficient—Communication: at WrapManager we make it our goal to speak with our clients at least once a quarter, but we love it when our clients are eager to communicate more. Whether it’s to get our thoughts on the market, to review your investment plan, or just to catch up on life’s events, we want to make ourselves available whenever you need us, and for whatever reason. And that means by email, phone, video conference, or a face-to-face meeting. If your current financial advisor is slow to return your calls and does not reach out at least once a quarter to review your investment plan and progress, it may be time to assess how much of a priority you are to them.
2. Excessive Portfolio Turnover: if it feels like your advisor is constantly trading in your accounts and switching strategies, it could potentially mean one of two things: either they are second-guessing their approach, or they are managing your portfolio with short-term goals in mind instead of long-term goals. Either outcome could run contrary to what you’re trying to accomplish over time.
3. You Don’t Have a Written, Comprehensive Investment Plan: if your advisor has simply taken your assets under management without providing you a comprehensive plan for how they plan to meet your goals, that could spell trouble. Our approach is to talk with our clients about their entire financial situation, their investment objectives, their income needs, and their risk tolerance before putting together a written investment plan that spells out our approach. And then continue to review and update that plan ongoing.
4. The Advisor is Trying to Manage the Portfolio on Their Own: is your financial advisor single-handedly managing your assets, growing their practice, servicing other clients, and handling all of your operational needs (like cash withdrawals, RMDs, etc…)? Chances are you might be in a ‘jack of all trades, master of none’ situation. At WrapManager we research, evaluate, and select money managers and recommend those strategies to our clients that align with their investment plan. We let the expert managers do their jobs (and monitor them to make changes when needed) and we focus on servicing you and refining your investment plan over time.

Start Off the New Year on the Right Foot