Sneaky Suspicions About Your Advisor?

Todays investors are more savvy and sophisticated than ever. Unfortunately, as your expertise and expectation levels have increased, the traditional advisor/client relationship has changed very little. Many of you havent felt comfortable with your advisor relationship for some time. If youve got a sneaky suspicion that your advisor isnt delivering all he or she should be, then this article is for you. Guarding Your Wealth" is a nationally syndicated weekly personal finance column written by Jeffrey D. Voudrie, CFP. Please visit our website, www.guardingyourwealth.com to read past articles in our archive.

(PRWEB) February 21, 2005 -- Todays investors are more savvy and sophisticated than ever. Unfortunately, as your expertise and expectation levels have increased, the traditional advisor/client relationship has changed very little. Many of you havent felt comfortable with your advisor relationship for some time. If youve got a sneaky suspicion that your advisor isnt delivering all he or she should be, then this article is for you.

Foremost among the complaints I hear from investors is that theyre tired of being sold. You can smell a sales pitch a mile away. You know when you sit down with an advisor that youre getting a well-practiced spiel given countless times before. You know this advisor is getting paid on commission, but how much is this influencing their recommendations?

When you are being pitched an insurance product like an equity-indexed annuity or a variable annuity, remember most advisors are paid on commission, they have to sell a large number of investments every month or they no longer have a job. And if they have the choice of offering a mutual fund with a 2% commission or an equity-indexed annuity with 10% commission, which will they recommend?

This brings us to a second investor complaint. Besides knowing theyre just being sold, investors are also beginning to realize theyre all being sold the same thing! Each advisor promises to meet your unique needs, but you have this uneasy feeling that this advisor has cookie-cutter solutions for all his or her clients. You feel like a square peg being forced into a round hole.

Once again, your suspicions are true. The traditional advisor/client relationship is built on trying to deliver pre-packaged products designed to appeal to the masses. You soon recognize that regardless of what the advisor says and in spite of your unique needs, you are being sold the same 'solution as everyone else.

Many investors confuse the attention they receive during the selling process with the attention theyll receive afterward. In most cases, the two are entirely different. Before the sale, youre treated as special. After the sale, youre just another face in the crowd. You soon realize that the advisor isnt monitoring or managing your money the way you expected. All that warm fuzzy attention has been replaced with indifference. What happened?

Once you pass the 'courtship phase of the advisor relationship and you become a client, your advisor moves on to repeat the procedure with the next prospect. Starting with a monthly paycheck of zero tends to do that with people. Besides, they arent getting paid to service your account. Theyre getting paid to sell you. Once youre 'tapped-out, its time to find another 'cherry.

If youve been a serious investor over the last decade, you probably discovered something else about your commission-based advisor. When times got tough, as they did back in 2000, you expected your advisor to manage your money and take steps to prevent losses. Remember their sage advice? Just hang in there. The market will come back." And they sat on their hands and did nothing while your nest egg dropped 10%, 20%, or 30% in value. What kind of advice is that? Many of you still havent recovered those losses several years later. You probably would have done better on your own!

Youve also discovered that most commission-based advisors arent the financial experts they market themselves to be. Most of the training they receive revolves around how to be better salespeople, not how to manage their clients money. They cling to the buy and hold strategy because it doesnt require much effort on their part.

So what should you do? First, find an advisor whose financial incentives are aligned with your success. You should only have to pay them for them period they manage your money. Remember that you arent going to know if an advisor is the right one for you until after youve worked with them for several months, so dont pay up-front commissions or allow yourself to be locked-in by surrender penalties. Do your homework. Make sure your advisor is acting in your best interest, not just their own.

Want my take on your situation? For free, clear, unbiased advice call or send your questions to jeff@guardingyourwealth.com. I will respond to them personally. Also, see answers to questions other readers have asked on the Q&A page at www.guardingyourwealth.com.

Mr. Voudrie is a Certified Financial Planner, nationally syndicated newspaper columnist and President of Legacy Planning Group, Inc., a private wealth management firm that employs sophisticated proprietary strategies designed to protect and grow its clients' investments. He can be reached toll-free at 1-877-827-1463 or at jeff@guardingyourwealth.com

Looking for an energetic expert who is passionate about financial and wealth management? Mr. Voudrie is an excellent speaker who will excite and inspire your audience. Mr. Voudrie is available for a limited number of speaking engagements, television appearances and radio talk shows. For booking information, contact Christine Lavender at (877) 827-1463 or email christine@guardingyourwealth.com.

Related Articles can be found at www.guardingyourwealth.com under the Guarding Your Wealth Article Archive:

The Secrets to Choosing An Advisor

The Secrets to Choosing An Advisor, Part II

The Secrets to Choosing An Advisor, Part III

Performance Really Does Matter

Equity-Indexed Annuities, Agents Prey On Unsuspecting

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