When it comes to something important with our health, it is common to get a second opinion, but what about a second opinion for your retirement plan? Cory Sickles, president of Safe Harbor Retirement Group is here to talk about the importance of a financial second opinion.
Cory, tell us why it’s wise to get a second opinion on our financial plans and investments.
With unstable market conditions, I’d say right now the number one reason to get a second opinion is to make sure that your investments are protected as there may be something you aren’t seeing or that your advisor hasn’t done to protect your assets during this time. Being proactive is key.
Often, people don’t completely understand or know what they are invested in, because their advisors aren’t providing their clients the information they need. If this is true in your case, you should have another advisor review your investments.
Getting a review of your portfolio can help you better understand it, identify ways to improve its performance and possibly lower the fees and taxes you pay on it.
Could it be that your current advisor wasn’t necessarily working in your best interest. You’ve discussed that here before.
That’s can be the case. If you were not working with a fiduciary, your advisor may have only had to adhere to the “suitability standard,” merely requiring that an advisor’s recommendations be reasonable for the investor’s circumstances. Under this standard, the representative can provide something other than what is best for the client and maybe something that brought them a larger commission.
Get a second opinion from a fiduciary advisor who must always keep the interests of the client and see if there are any differences in the advice they give.
Transparency is something that is very important in the advisor/client relationship.
The process of getting another opinion can help you understand what you own, teach you how and what you are paying in fees. Often this important information is rushed through or sometimes hidden in stacks of paperwork.
I will meet with people who didn’t understand the terms and conditions that went along with the investment they were put in. This could be an issue that has tied up their money for more years than they wanted, or it could be that they are paying fees that weren’t obviously disclosed.
Sometimes a second opinion can’t help if you are locked into an investment for several more years, but it can help you understand what you are invested in and give you the knowledge to know what to do when you have the opportunity to make a change.
Sometimes another review can help in lowering fees and taxes?
No matter what investments are in your portfolio, there will be expenses involved. Fees can include the expense ratio of the mutual fund or ETF; account fees; advisory fees; 12 B-1 fees; transaction charges; mortality and expense fees on a variable annuity; termination fees; and commissions. Investors should be able to identify all of the fees on their accounts and know the reason for each of them.
We can run reports showing not only how your investment is performing, but also the fees you are paying. The lower the expenses, the more money stays in your account.
And it is very important to know how your investments are going to affect your taxes. Taxes and fees can really eat up retirement savings.
If someone isn’t meeting with their advisor regularly, situations could have changed and their plan no longer suits them or their situation/needs.
As people get closer to retirement, their level of risk in investing should most likely decrease. Unfortunately, without proper advice, many individuals approaching retirement have the same level of risk in their portfolio that they had 10 or even 20 years ago. A big change in the market could smash their nest eggs. That’s why we meet with our clients at least once a year and reassess their risk level.
In your experience, do people come in to get a second opinion and find that they are doing well?
Often they do, and that’s good. If a second opinion shows that your investments are doing well and on the right track for your financial goals and there’s not really anything that can be done to improve your situation then it will have been a couple hours well spent and should give you peace of mind. If we find there is a way to better protect or grow your assets, they we can help you make those changes. Either way, it’s a win-win.
At Safe Harbor, a second opinion on your investments is complimentary just as all of our meetings. We can do a call or video conference with you. Visit www.SafeHarborOH. Com or call 614-760-0670 to schedule.
