If you weren’t around, what would happen to your investments? In many families, one person
handles investment decisions, and spouses or children have little comprehension of what
happens each week, month or year with a portfolio.
In an emergency, this lack of knowledge can become financially paralyzing. Just as small
business owners risk problems by “keeping it all in their heads,” families risk problems when
only one person has an understanding of investments.
This is why a trusted relationship with a financial advisor can be so vital. If the primary
individual handling investment and portfolio management responsibilities in a family passes
away, the family has a professional to consult – not a stranger they have to explain their
priorities to at length, but someone who has built a bond with mom or dad and perhaps their
You want an advisor who can play a fiduciary role. Look for a financial advisor who upholds a
fiduciary standard. Advisors who build their businesses on a fiduciary standard tend to work on
a fee basis, or entirely for fees. Other financial services industry professionals earn much of
their compensation from commissions linked to trades or product sales.
Commission-based financial professionals don’t necessarily have to abide by a fiduciary
standard. Sometimes, only a suitability standard must be met. The difference may seem minor,
but it really isn’t. The suitability standard, which hails back to the days of cold-calling stock
brokers, dictates that you should recommend investments that are “suitable” to a client. Think
about the leeway that can potentially provide to a commission-based advisor. In contrast, a
financial advisor working by a fiduciary standard has an ethical requirement to act in a client’s
best interest at all times, and to recommend investments or products that clearly correspond to
that best interest. The client comes first.
You want an advisor who looks out for you. The best financial advisors earn trust through their
character, ability and candor. In handling portfolios for myriad clients, they have learned to
watch for certain concerns, and to be aware of certain issues that may get in the way of wealth
building or wealth retention.
Take account and fund fees, for example. These can subtly eat into retirement savings.
According to Investment Company Institute research, annual expense ratios of stock funds
averaged 0.77% in 2012. So why do many investors endure annual fund fees well above 1%?
(The typical equity mutual fund charges an investor 1.3-1.5% a year.) An advisor acting in your
best interest could alert you to egregious fees and work with you to find alternatives. 1,2
Many investors have built impressive and varied portfolios but lack long-term wealth
management strategies. Money has been made, but little attention has been given to tax
efficiency or risk exposure.
As you near retirement age, playing defense becomes more and more important. A trusted
financial advisor could help you determine a risk and tax management approach with the
potential to preserve your portfolio assets and your estate.
Your family will want nothing less. With a skilled financial advisor around to act as a “co-pilot”
for your portfolio, your loved ones have someone to contact should the unexpected happen.
When you have an advisor who can step up and play a fiduciary role for you today and
tomorrow, you have a professional whose service and guidance can potentially add value to
your financial life.
If you’re the family member in charge of investments and crucial financial matters, don’t let
that knowledge disappear at your passing. A will or a trust can transfer assets, but not the
acumen by which they have been accumulated. A relationship with a trusted financial advisor
may help to convey it to others.
Tom Chancellor is a Certified Financial Planner Professional helping clients enhance their financial peace of mind. Tom spent 20 years as a marriage and family therapist and now incorporates resources from psychology, communications, and relationship studies in financial planning for people who experience life-changing events. Tom helps his clients and other financial professionals respond to life transitions such as divorce, death of a spouse, retirement, receipt of an inheritance and legal settlements. Contact Tom with questions at firstname.lastname@example.org.
Securities offered through Comprehensive Asset Management and Servicing, Inc. (“CAMAS”), 2001 Hwy 46, Ste. 506, Parsippany, NJ 07054,1-800-637-3211. Member FINRA/SIPC. Teak Tree Capital Management, LLC, is independent of CAMAS.
This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
1 - forbes.com/sites/johnwasik/2013/06/27/why-mutual- fund-fees- are-too- high/ [6/27/13]
2 - investopedia.com/university/mutualfunds/mutualfunds2.asp [12/5/13]