You money’s gone and you’re pissed. How to know if it’s time to pull the plug.
Forbes: In September, when hundreds of investors with more than $1 million in financial assets were surveyed, 57% said they planned to dump their current financial advisers and only 6% said they’d recommend him or her to a friend. “I’ve never seen this level of discontent, not even after the dot-com bust,” says Russ Alan Prince, whose Redding, Conn. firm conducted the survey. “People are running from their financial advisers.”
You should consider spliting if:
- He consistently underperforms, in good times too. He should be communicating which benchmarks to measure stocks against and they should be different for various categories. You should also not be getting a cookie-cutter asset allocation.
- There are undiclosed and/or excessive fees. Have him disclose in writing how he’s getting every fee.
- Conflicts of interest with duty exist. If your adviser is trying to push his firm’s own funds and products down your thoat, particularly if they’re not necessarily in your best interest, be very wary.
- Your adviser is going trade crazy. This can give him lots of extra money but fees and taxes for you.
- He’s neglecting you or failing to do administrative things. If you have to call him twice about things, that’s one time too many for the money you’re paying him.
- Is he all about incomprehensible jargon and getting overly defensive if you question him? Or maybe just doesn’t listen to you. Not good.
- Inappropriate investments. Do you have too much of one asset class for someone of your age/wealth/risk tolance and/or is he over-pushing and under-exlaining investments that are too sophisticated for you to understand?
To read more go to Forbes.
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