What you need to know before you hire a financial advisor or financial planner in Colorado

Picking the best financial advisor or financial planner can be a very challenging task.  It is confusing and mistakes can be VERY expensive.  I urge you to “Trust but Verify” that your current advisor and your current strategy are optimal for your retirement goals.  Most investors are overpaying!  If your financial person claims to be an “advisor”, have them sign the “fiduciary oath”, make sure they charge less than 1% and use low-cost ETF’s/ funds.  FYI – Our fees are 0.6% on the first $1 million and decline above $1 million. (schedule a free 2nd opinion below)

Warning:  If you have been sold red flags such as annuities, whole life insurance, non-traded REIT’s or commission products like A shares, B shares, or C shares, I strongly suggest you look at your total expenses and seek professional help.

Here are some tips to help you pick the best financial advisor in Colorado or nationwide.  If you are considering using a traditional stock broker like Wells Fargo, Merrill Lynch, Morgan Stanley, JP Morgan, Chase, Edward Jones, Ameriprise or your local bank, I encourage you to really take a hard look at the fees and commissions.  If you have over $500k in a portfolio, your total fees and expenses should be under 1%.  Times have changed, you no longer need to pay 1% of your assets for financial advice.  I see many portfolios with total fees of 1.5% to 2.5%+ per year.  In my opinion, that is way too much to spend.  Our fees are 0.6% on the first $1 million and decline above $1 million.  We offer a tremendous value to our clients and help build a custom portfolio for your goals and objectives.  You don’t have to pay 1% for access to DFA Dimensional Funds

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1. 1. Understand how you pay for financial services. Many investors don’t realize that the cost of investing has dramatically declined over the last 10 years.  If expected future returns from a diversified portfolio are 7% per year and you pay 2% in fees, you pay 28% of your gains each year to Wall Street.  There are 3 primary ways to pay for investing services:
      • Commission-based Advisor – This type of advisor is typically a broker or financial advisor and they sell you products for commissions. These can be stocks or mutual funds with A shares or B shares or C shares.  The investments can also be some sort of insurance product or non-traded REIT.  The commissions can be from 1% to 5.75%+.  Some insurance products and non-traded REITs can be much higher.  This person is held to “suitability standard of care”; to do what is “suitable” for other similar investors.
      • Fee-based Advisor – This type of advisor sometimes works on commission and sometimes charges you a fee. This relationship is very confusing for investors.  This person is held to a “suitability standard of care”: to do what is “suitable” for other similar investors.
      • Fee-only Advisor – This type of advisor works on a fee-only basis 100% of the time. There are no hidden commissions or fees.  This person is held to a “fiduciary standard of care”.  By law, this advisor is obligated to put the client’s interests first at all times and disclose any conflicts of interest.
      • Soon, it may be illegal for your advisor to overcharge your retirement accounts (IRA/401k).  No commissions, no annuities, no hidden fees.  Don’t wait for the Government to finalize this new law, take action by having your advisor sign this pledge!

       

   2. Understand what services you need to pay for.  Many investors are not aware of how they pay for financial services.  This has serious implications and can drastically reduce your retirement nest egg.  Do you need portfolio management?  Do you need financial planning?  Do you have solid goals for retirement?  Can you maintain your lifestyle in retirement?  When is the optimal time to take Social Security?  Typically, annuities are not an investment, they are an insurance product.
      • We suggest that you get an invoice every quarter from your Advisor.
   3. If you have less than $500k, just use Vanguard and save 20% of your gross income each year. – You work hard for your money and your family.  65% of retirees who did not prepare adequately for a comfortable retirement did not realize this until they had already retired.  A $500k nest egg will only generate about $20k per year in retirement spending.  We encourage you to take action.  
   4. Find out if you have significant problems with your strategy or portfolio sooner rather than later.  When it comes to retirement planning, a solid retirement will not happen by chance and there are no quick fixes.  It takes years of planning, preparation and discipline to hit your goals.

 5 Free Checklists That May Save You Thousands – Really! (download checklists for tax savings, funding child’s college, taking care of aging parents and more)

Book a free 2nd opinion meeting on our calendar below.

• Read this — The Pledge Most Advisors Won’t Sign!

• Watch this video – Why Planning & Why Now!
• Watch this video – The Most Important Decision of Your Financial Life
• 7 Steps to Get Your Financial House in Order in 2017!

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 Please Remember: Past performance may not be indicative of future results.  Moreover, no current or prospective investor should assume that future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in any general informational materials or educational sessions, will be profitable or equal any corresponding indicated historical performance level(s).  Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for an investor’s retirement portfolio.  Moreover, you should not assume that any discussion or information contained in this website serves as the receipt of, or as a substitute for, personalized investment advice from Integrity Investment Advisors, LLC or NoCo Investment Education. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.

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