9 Signs Your Financial Planner Isn’t Helping You
One of the most common pieces of advice touted by financial planners is… to hire a financial planner. It’s reasonable to take this ostensibly self-serving recommendation with a grain of salt — or hey, just pass over the whole shaker — but bear in mind, it’s not bad advice. People with financial planners do, overall, fare better, financially, than those without.
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But every industry has its fair share of subpar professionals. The financial planning sector is no exception. Just as there are bad plumbers, bad contractors and bad medical professionals, there are bad financial planners — or, at least, financial planners who aren’t helping you.
How do you know when your financial planner is failing to help you? When might they actually be putting you at risk, in fact? Look out for these nine signs.
They Don’t Provide an Investment Policy Statement
Solid financial planners who are genuinely helpful implement an investment policy statement to guide each of their engagements.
“This document, which usually changes over time, outlines a client’s investment objectives and tolerance for risk, which reflects relevant time horizon, liquidity, taxation, legal and unique considerations,” said Thomas Brock, CFA, CPA, expert contributor at Annuity.org. “If your financial planner has never delved into these matters with you, you should be concerned.”
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It’s Been Over a Year Since They Last Went Over Your Plan With You
Your financial planner should be actively managing your portfolio, not just letting it idle along collecting dust. To do this, they must revisit your financial situation every year, at least yearly — a point highlighted by Kyle Luetters, advisor at MONETA.
If they’re not doing this, they’re failing to stay fully in the loop in the way that you need.
They Haven’t Offered To Review Your Workplace Benefits
Your workplace benefits, if you have them, are integral to your financial life. Your planner should be on top of all that you are entitled to, here.
“This is one of the most powerful places for folks to get ahead by leveraging various retirement options, reviewing health insurance options, looking at life and disability insurance options and investigating group legal,” Luetters said.
They Haven’t Reviewed Your Estate Planning Documents
If your financial planners hasn’t recently reviewed your estate planning documents — or urged and helped you to get them done — they’re letting you down.
“Without these documents, all of the wishes and goals you have for your wealth after death aren’t likely to happen,” Luetters said.
They Haven’t Reviewed Your Tax Return
A financial planner should also review each of your tax returns.
“There might be missed opportunities, such as tax bracket arbitrage, unutilized tax credits and more,” Luetters said.
They Aren’t Practicing Asset Location
“Asset location means placing tax-efficient assets — like foreign investments, tax-exempt fixed income — in taxable accounts, and growth focused investments should be in tax-deferred accounts,” Luetters said.
Your financial planner needs to be diligently practicing asset location to make sure that your money is working as hard as it can.
They Aren’t Educating You
Not only should your financial planner excel in financial literacy, they should also excel in teaching you what they know.
“You should feel like you have learned something new when you leave most meetings,” Luetters said.
They’re Aggressively Trying To Sell You Something
If your financial planner is acting more like a salesperson than a guide and consultant, you could be in trouble.
“If your financial planner is strongly encouraging you to purchase certain investments, products or services, you need to take a step back and evaluate his or her motives,” Brock said. “A fiduciary financial advisor will never push anything, unless it is in your best interest; even then, a fiduciary will never use aggressive sales tactics.”
They Don’t Really Understand Your Goals
Your financial planner must have a solid grasp on your financial and life goals.
“If you don’t feel as though your planner knows your goals and objectives — and regularly asks about them — then they cannot help you properly,” Luetters said. “At the end of the day, this is your life and your plan. The financial planner is merely the guide and helps you achieve those goals in the most efficient manner possible.”
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This article originally appeared on GOBankingRates.com: 9 Signs Your Financial Planner Isn’t Helping You
