It is important to review your investments on at least an annual basis, and with the New Year rolling around, this can be a perfect time. Find all your investment information and review what advice or suggestions your current financial planner has made and determine if these suggestions are helping you to achieve your financial goals.
This is no different than evaluating other professional service providers that are involved in your life. If you aren't happy with the services provided or you believe you are not achieving your goals, take the time to interview at least a few other financial planners and see if you feel one of those professionals would be a better match.
A few different aspects to consider when evaluating your current financial planner include:
- Review the information provided by your financial planner and determine if he or she is meeting their own performance goals and benchmarks. If you no longer have this information, contact your advisor and ask for it or have a face-to-face meeting and ask.
- Consider if the investment advice or suggestions provided were in line with your goals discussed with the financial planner at your annual review. For example, you may be approaching retirement, so your investments should be moving from the higher risk investments to lower risk options that provide protection against sharp changes in the markets.
- Look at the mix of investments in your portfolio to determine if you have a good balance in the event of changes in the market. This includes having different types of stocks, bonds, money market accounts, metals, retirement plans, and other investments.
- Determine if you really understand the risks of any investment. It is easy to talk about the potential of an investment, but less reputable financial planners tend to gloss over the potential risks.
- Assess if you feel confident and comfortable with the financial planner. If there have been errors, mistakes or omissions in discussing the investment with you, there may be problems with trust. A different professional you have researched and met with may be a better match in this situation.
It is important to have the right financial planner working on your behalf. Comparing your goals and objectives to the performance of your financial planner can help you determine if your current professional is the right person for you or if it is time to make a change.