Time for a Conversation…With Yourself
By Alexander W. Lippert, Colorado Springs LIVING WELL Magazine
We all know the story of the “Great Recession” and how it has changed our lives. Many people lost money. A lot of money. Many of us have seen continued hardship amongst our families and friends and the reasons why are numerous. Telling yourself that “everyone lost in 2008 too so it’s OK,” or that “this recession was different – next time will be better” is not the capitalistic mentality that our great country was built upon; it is rather a misguided way of blind optimistic justification through collective reasoning.
From experiencing the “financial advisor process” from a client perspective, to living it from the inside, I have observed a few simplistic, yet powerful concepts that most seem to disregard which can have a serious impact on personal financial stresses and long-term portfolio performance.
One of the most prominent mistakes folks make is placing too much focus upon return. From my experience, most people pay little attention to risk while heavily scrutinizing reward. This should be the opposite. One of the fundamental ways in which a retirement plan can be successful in the long-run is to have risk effectively managed. Building a realistic retirement plan you can be confident in rests upon its loss potential, not gain. Many advisors may sell themselves through illustrating returns but fail to describe what risk was taken to achieve those gains, and as many of us saw in 2008, these risks are far too great.
Are you content with the idea that [hopefully] we will be in a bull market when you retire? Probably not. If you can find an advisor who works with you to build a comprehensive strategy, based upon conservative projections, that brings you to your needed monthly income at retirement, there is no reason to take any extra risk. Risk in relation to retirement planning translates into lifestyle risk. Why take the risk of having to work longer or decrease your standard of living to attempt to earn an unneeded, excess return on your money? Know yourself and build a strategy that fulfills your unique need.
The advisor relationship is based on trust. Trust starts with objectivity. The multitude of differently styled funds and offered products out there represent an opportunity for you to have a broadly diversified, customized portfolio. The idea that one company can have the best products or funds in every category is certainly a questionable notion. Do you think it would be valuable to have an advisor who can objectively look at what they all have to offer and choose specific funds or products from thousands of potential suitors to tailor a portfolio to your specific situation?
Advisors should strive to see clients as people rather than numbers on their large books of business. Contact from your financial advisor only once a year for a review or only when he/she wants to sell you something is a travesty, but unfortunately has become commonplace. America’s political and economic direction has [arguably] never been shrouded in such uncertainty. Our government’s incessant spending sprees and endless supply of controversial policies coupled with an extremely sensitive, mending economy, points towards ongoing volatility speckled with opportunity. Having a close relationship with your advisor is imperative so that you can better understand how to navigate these moguls and position yourself to meet your goals.
Individuals, families, and businesses need to review their financial advisor’s track record and decide if they are truly happy with the performance, service, and relationship with their financial advisor. If the answer is anything short of a staunch and automatic YES, then strongly consider getting a second opinion from an objective, reputable source. You may be surprised with what you discover but at the very least, you may have pressing questions and important ideas to discuss with your current advisor.
Alexander W. Lippert is a financial advisor with Strategic Financial Partners located at
1755 Telstar Dr. Suite 501 in Colorado Springs. Reach him at 719-388-0229, or via email@example.com.
This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding any funds or stocks in particular, nor should it be construed as a recommendation to purchase or sell a security. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. It is important to keep in mind that asset allocation and diversification do not guarantee against loss, they are methods used to manage risk. Securities and investment advisory services offered through Securian Financial Services, Inc., Member FINRA/SIPC. Securities dealer and registered investment advisor. Strategic Financial Partners is independently owned and operated. 404432 DOFU 102111