Does Your Advisor Fill The Gap?

What are you paying your advisor for? Many people are frustrated because their advisor isn't meeting their expectations. In this "Guarding Your Wealth Special Report", Nationally syndicated columnist, Jeffrey D. Voudrie, explains what causes this frustration and how you can avoid it. Get the facts here with information you won't find anywhere else. Mr. Voudrie is the President of Legacy Planning Group, a private wealth management firm that employs sophisticated proprietary strategies designed to protect and grow its clients' investments. Please visit our website, www.guardingyourwealth.com to read past articles in our archive.

(PRWEB) May 8, 2004 --There is a wide gap between what many investors expect from their advisor and what the advisor actually delivers. This gap is a great source of frustration, anger and ultimately sleepless nights. Read on to find out how to recognize the gaps, fill them, or better yet, avoid them altogether.

Frank" called me one day from sunny California. He was frustrated and upset and didnt know where to turn. Hed recently entrusted his local broker with his lifes savings and naturally had certain expectations. He expected the broker to invest his money wisely, closely monitor his account and to take action when necessary to keep it from losing value. You probably have the same expectations—and rightly so. After all, isnt that what you pay an advisor to do?

Franks broker recommended dividing his precious eggs into several baskets. And Frank simply followed his advice. Frank went home thinking all was as he expected. But just a few months later the account began to drop in value, losing over 3% in just one month. Thats when the problems started.

Frank immediately went to his broker and said, Hey, Ive lost 3% in the last month. You need to do something!" His brokers response was typical. Just hang in there. You just need to give it some time. Lets get together in 3 months or so and well review your account then." It became painfully obvious to Frank that his broker was not actively monitoring nor managing his account.

(Mr. Voudrie responds to questions from readers on an almost daily basis. If you would like clear straightforward unbiased answers to your financial questions, contact Jeff@guardingyourwealth.com)

Frank recognizes that investments change value (sometimes quickly) and can be affected by world events. He is comfortable with a limited amount of fluctuation. But he wants to know that someone will take action to limit those losses when necessary. Frank wants a safety net and his current advisor isnt providing it.

There was a huge gap between Franks perception of what his broker would do and reality. The vast majority of brokers, advisors and insurance agents merely act as middle-men between various money managers and the consumers who use them.

Money managers are the ones who make the buy and sell decisions at the mutual fund or the insurance company. They are responsible for large pools of money, sometimes numbering in the billions of dollars. They dont watch over your money specifically; they watch over the entire pool. Theyre concerned about the return on the entire pool over a period of time, not your specific investment in it. They may even be required to stay fully invested which means their pool can lose significant amounts of money in down markets.

So who monitors how well the money manager does with your money? It should be your advisor, but the typical advisors job is to sell investments. They get paid on the sale so they are motivated to focus on that. They help you put your eggs in several baskets, choose the money managers for those baskets and then put the responsibility for watching your eggs with the money manager. If one of your eggs gets dropped, it will be offset by another egg that did well—hopefully.

The frustration gap occurs because neither your advisor nor the money manager actively monitors your money. Neither will take action to prevent you specifically from losing
money. The problem isnt the type of investment; its the type of advisor.

How can you avoid this frustration? First, find an advisor who will accept the responsibility of closely and actively monitoring your investments; taking action if one moves outside predefined parameters.

Secondly, dont take their word for it—find out the specific systems and procedures they have in place to do it. For instance, my clients know I have proprietary software that monitors a multitude of factors in their account over 4,000 times every day. If the numbers begin to fall outside the pre-set ranges, alarms are triggered and we take action. For investors like Frank, this gives them the safety net they are looking for.

Finally, hold your advisor accountable. If your advisor doesnt perform, find someone who will. The right advisor will fill the gap, exceed your expectations and allow you to sleep at night. Dont rest until youve found one.

Mr. Voudrie is a Certified Financial Planner, a nationally syndicated columnist and the President of Legacy Planning Group, Inc., a Private Wealth Management firm in Johnson City, TN. He can be reached by calling 1-877-827-1463 toll-free, by email at jeff@guardingyourwealth.com or by going to www.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.

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