By Allen Giese, ChFC®, CLU®, ChSNC®
Transcript:
So picture this… I’m watching TV the other night with my wife and we’re sitting on the couch. I start flipping through the channels looking for something interesting and I start realizing, Holy Cow… there are A LOT of channels! I mean, there’s all the Cable channels (as in, like hundreds), and then there’s the internet based channels like NetFlix, Amazon Prime and Disney Plus. So I turn to my wife and I say, “Do we pay for all these?” And she’s like, Yeah. Every month. So what hit me was that, ya know, sometimes we take things for granted and just keep paying for them without really getting the most out of them. For little things, like maybe extra channels on your TV, it doesn’t really change your life. But for big things, like financial advice, it can make a real difference in your life, as well as your family’s. And when it comes to your retirement planning, especially if you are an FRS Special Risk participant, getting the most out of your financial advisor can make a big difference in your retirement experience. Over the last 29 years I’ve learned first hand why some of my clients have been able to get more out of me, as their advisor, than others. So in this video I’m going to show you the 3 biggest things you can start doing right now to get the most out of YOUR advisor.
1. Easily, the most important thing you can do to maximize what you get from your advisor is to look at whether or not your advisor is a true fiduciary. This is all about, how does your advisor get paid? What that means is, if your advisor gets paid to sell you any investment product, whether it’s life insurance, annuities, investments… and gets paid a commission for selling you those products, then he or she IS NOT a fiduciary to you… even if they tell you, “Don’t worry, I have your best interest at heart.” Being a fiduciary requires your advisor to act in your best interest… even over his own. Which typically is going to mean, selling you investments and getting paid a commission is not in your best interest… but it probably is in theirs! So why is this the most important thing? Because the reality is, if your advisor is getting paid to recommend specific products to you they have a conflict of interest to show you product that pays them higher commissions than other products. It creates a bias and the advisor can’t have your best interest at heart. Financial product is a commodity. Relying on your financial product salesperson to be your financial planner is kinda like relying on a pharmaceutical rep to be your doctor. Bad idea and many people have figured it out by now. They’ve learned that there is no substitute for having an advisor who is not paid to sell them financial products. And it makes sense that they get better advice when it’s not tainted by the salesperson’s desire to earn additional income from commissions. So that’s number one… If you’re advisor gets commissions, my opinion after doing this nearly 30 years and having been on both sides of that fence myself, is that you can probably do better.
2. The next best thing you can do to get the most out of your financial advisor is to contact them regularly. Set up a meeting every 6 months, just like you would for the dentist. You’ll be surprised at how much you’ll have to talk about… well that is, if your advisor isn’t just trying to sell you more product and is truly a financial planner. I’m always amazed at how much can change in the life of my client over just 6 months and how much that change can affect their future financial security. A good advisor is trained to recognize how changes today could affect your finances tomorrow and it’s always better to be proactive rather reactive when it comes to finances. It usually means you have more choices or options. At our firm we have regular progress meetings for our clients. Every client has goals. Even if that goal is something obvious and easy to define, like, “I want to live my current lifestyle in retirement and not run out of money.” Getting together and checking the regular progress toward that goal is critical because it allows us to monitor where we are and if we’re on track. It’s infinitely easier to make a minor course correction early than a major turn or major lifestyle change, later.
3. Ask questions. Don’t be afraid to ask and don’t ever feel like you are asking too much or that your question is insignificant. Even if you are asking the same question because it just isn’t making sense. This stuff is not rocket science and it should actually be pretty easy to understand … if it’s explained well. So if it’s not, to me, that’s a red flag. You pay your advisor handsomely … whether you know it or not. Whether that advisor is the FRS system or someone you’ve hired. They work for you. So if they are annoyed by you asking questions, to me that’s a red flag that someone’s priorities aren’t exactly in line.
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