How to Replace Your Financial Advisor
Have you ever wanted to fire your financial advisor? You’re probably not the only one questioning the worth of some financial advisors. While undoubtedly there are some good ones out there, it is hard to differentiate the capable and honest ones from the rest. And to add insult to injury of potentially losing money, you pay for this incompetence as well. It would be fine if they actually earn their money, but what happens if they don’t? How would you replace a bad financial advisor?
One option of excess cash is to just park it in the bank (I recently switched to ING Direct). However, with the paltry interest rates that most banks are offering right now, that amounts to pretty much hiding it underneath your mattress. What you want to do is to get your money to work for you.
But if a financial advisor is not an option, then who is? The answer is pretty simple. There will never be another person who cares about your money as much as you do yourself. You have your best interest at heart so that makes you the ideal candidate.
Some people get frightened about the thought of taking care of their own finances but the truth is, investing for yourself is not that complicated. Financial advisors tend to over complicate things to put themselves in a better light. The simplest and best way for the average Joe to invest in the stock market is through index funds. If you look at Warren Buffett stock picks (who just happens to be the most successful investor in the world) he keeps things very simple. He invests only in simple businesses and if he doesn’t understand how the business makes money, he doesn’t invest in it. Buffett invests in long term stock picks because he believes capitalism will prosper over time. This is not to say he holds onto a bad stock forever; however, it does mean he does his due dilligence when buying stocks to minimize the chances of making a bad investment in the first place.
So, if you are losing money with your financial advisor, consider replacing him with yourself. You’d be amazed how motivated you become in learning about your finances and how to protect and increase your money.
RSS Feed
Email
“if you are losing money with your financial advisor, consider replacing him with yourself. You’d be amazed how motivated you become in learning about your finances and how to protect and increase your money.”
I think you are too kind to the advisor. By learning how to invest most people can smoke what they can do with an advisor.
I would suggest checking a new service called http://www.peoplesfinancialadvisor.com which is very relevant online financial planning offering.
They offer free assessment of your financial situation (regardless your income level) and a full comprehensive financial plan for $99. The report I got was extremely valuable – worth every dollar invested.
Good advice. I would suggest that even if your advisor has gotten good performance that you seek an objective appraisal of their approach. They may be taking excessive risk with your money.
Today with low cost index mutual funds and low cost exchange traded funds it is very easy for individuals to manage their own money. Furthermore they will save a boatload of investment management fees in the process. And there are easy to read, straightforward books and blogs that explain how.
Sadly, many people give up when they see how much it costs to have their money professionally or they run in the opposite direction after hearing a jargon filled explanation of how to invest in their company 401(k).