Studies Show Investors Ready to Look at New Advisors

July 23, 2009 at 4:04 am Leave a comment

Breaking Up a Relationship Doesn't Have to be Difficult

Breaking Up a Relationship Doesn't Have to be Difficult

Breaking up is tough to do, especially when you’ve had a chummy relationship with your financial advisor. BusinessWeek recently ran an article urging investors to seek a second opinion, much the same way people do when they request opinions from more than one doctor. 

Read BusinessWeek Article:  Thinking of Switching Financial Planners?

“Just as a good doctor should respect your decision to see a second opinion, so should your financial adviser be open to review.”


Unfortunately, when it comes to money, the average investor focuses more on the emotional aspects of the client –advisor relationship rather than the objective facts. Given the volatility in the financial markets, investors continue to sift through the rubble over the last 18 months, only to find commissions, fees, taxes, and misallocated portfolios.

A Wall Street Journal article in April highlighted the survey from Prince & Associates Inc., which showed more than 75% of investors with more than $1 million to invest plan to move some money away from their investors – more than 50% intend to leave their advisors altogether. According to the Spectrem Group (July 2009 BusinessWeek article), only 36% of millionaires believe their advisors performed well through the financial crisis of 2008-2009. Another study done by the Wharton School of Business and State Street Advisors showed that only 31% of investing clients are extreme satisfied, even though their Advisors think 65% of the clients are very satisfied.

Now is the time to check under the hood to review advisor fees and performance

Now is the time to check under the hood to review advisor fees and performance

Over our lives, we have switched CPAs, attorneys, hair-stylists and auto-mechanics, so why the difficulty in considering advisor change? The emotional aspects and uncertainty of the financial markets can cloud the decision making process. That’s why now, better than ever, it is an ideal time to ask tough questions and shop around for the top advice you deserve. In addition to bad advice, commissions and fees could be eating away at your investment returns, forcing a later than anticipated retirement or a lower quality of life. I myself prefer filet mignon over macaroni & cheese.

Given the unabated free-fall of last fall appears to have abated and the economy appears to be finding firmer footing, do yourself a favor and get a second opinion – there’s not a lot of downside.

Wade W. Slome, CFA, CFP®

Plan. Invest. Prosper.

Entry filed under: Financial Planning. Tags: , , , , , , .

Ron Baron Swinging for Long Term Home Runs Praying for a Better Market with Pope Benedict XVI

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