A Second Opinion: Staying well informed in an uncertain economy
Just as medical knowledge and information grows and changes, so does the way we manage our investments and planning strategies to stay current with the economic conditions. A multitude of changes have occurred in our economy over the past several years that have caused many to rethink their direction. You may find it shocking that many advisors have not modified their clients’ planning or portfolio design, nor have they considered changes to ensure their clients’ risks are being managed appropriately.
While you may or may not be dissatisfied with your current service provider, there are many reasons to consider a second opinion. If you have been frustrated by the lack of uncertainty surrounding your financial affairs, consider having another financial professional review your strategy. Talking to an impartial source can also be helpful when reviewing your financial plan or a new financial product.
Knowing Where to Turn
When seeking a second opinion, find someone credible and knowledgeable about the topic at hand. Talk with a trusted advisor you currently work with such as your CPA or lawyer. If certain issues are beyond their scope of knowledge, they will likely defer the question to a more appropriately qualified professional, and you can ask them for recommendations of financial advisors they work with. Always do your own research on all referrals and make sure you know:
(1) Their experience level with the subject matter at hand
(2) Their background and credentials
(3) How they get paid—AVOID conflicts of interest.
Don’t be hesitant to COMPENSATE someone for an opinion! It could be the best money you’ll ever spend.
A couple who absolutely loved their advisor had always been slightly disturbed about the compensation arrangement. Their advisor said he was only compensated by their annual retainer fee, indicating a conflict free situation. After seeking a second opinion of total fees and compensation for their planning and investment management, they discovered that they were paying non-disclosed commissions on products in additional to their management and retainer fee, totaling nearly double what a normal compensation agreement should have been. Furthermore, they learned their plan was being implemented with no logical system (no defined risk level or diversification.)
You wouldn’t hesitate for a minute to get a second opinion on a serious medical issue for yourself. You wouldn’t even hesitate to encourage a patient to seek a second opinion in a matter of such importance. Why not apply the same patients’ rights you extend to your own patients to yourself in regards to the health of your finances?
