Is It Time to Fire Yourself or Your Avisor?

Wise investing is more about following a disciplined investment process than trying to find the best investment products. The process involves getting into the right asset mix at the outset, having information which lets you monitor performance and compare to the proper benchmarks, following a disciplined rebalancing process, paying attention to fees and being tax efficient.  Do-it-yourself investors should be able to answer “yes” to 60% of the first 20 questions. Investors who use a financial advisor should ignore the first five questions but be able to answer “yes” to 60% of remaining questions.

On this test 60% is a passing grade. What if you’ve failed the test? If you are a do-it-yourself investor you should consider firing yourself and using professionals who devote themselves full time to managing money. If you are already with a financial advisor you should tell your advisor you’ve failed the test and now, for financial peace of mind, you need more information (such as benchmark performance comparisons, an investment policy statement, a financial plan, explanation of the investment process being followed, and full disclosure of all fees and costs). If your present advisor cannot deliver  essential performance information – you have to consider looking for a new advisor. In searching for a new advisor you should aim to deal with individuals who act as fiduciaries and avoid conflicts of interest.

Warren MacKenzie, CA is the founder of Weigh House

Investor Services and a Stewardship Counsellor with

HighView Financial Group.

warren.mackenzie@weighhouse.com

Tel. (416) 640 - 0550