How to Manage a Disagreement With Your Financial Adviser
Knowing how to deal with a disagreement can improve both your finances and your relationship with your planner.
It can be a good thing to disagree with your financial adviser occasionally. After all, if you’re active in managing your financial life, rather than handing it all over to a pro, you’re sure to have your own views. And once you’ve worked through a disagreement, it can bring clarity to both of you.
Still, dealing with a difference in opinion or approach can be uncomfortable. How do you know who is right, or how to move forward? Use these guidelines to navigate a disagreement — and to decide whether your adviser is still a good fit for you.
Hold a meeting, and make sure you’re ready for it.
To discuss a substantive disagreement, schedule an in- person meeting so you can gauge your adviser’s reactions. When you send an e-mail or make a phone call, you can’t see your adviser’s face or read their body language, which can be critical, says Tom Balcom, a certified financial planner in Lighthouse Point, Florida.
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Even in a video call, you may miss these things, he says. Ahead of your meeting, do some prep work.
Write down the questions you want to ask. It can also help to pinpoint the source of your frustration by including specific examples of financial moves your adviser made that you didn’t like, says Robert Laura, author of the book Retirement Intelligence.
Get aligned with your spouse or partner beforehand, too. Most financial disagreements are not between an investor and their financial planner, but between an investor and their spouse, says Laura.
For example, the husband might want to invest more money in the stock market, while the wife, who manages the family’s day-to-day finances, wants to set aside some of those funds for living expenses and emergencies.
Push for clarity.
If you don’t see eye-to-eye with your adviser on a certain aspect of your investing strategy or financial plan, the problem may be a lack of clarity.
For example, if you haven’t reviewed your risk tolerance lately, it’s time to have a discussion and put it in writing. "You need to know if you are bullish or bearish. Are you trying to grow your money or protect your money?" says Cary Siegel, author of Why Didn’t They Teach Me This in School?: 99 Personal Money Management Principles to Live By.
As you select investments that suit your risk tolerance and goals, your adviser should articulate several options and provide the reasons for making those suggestions, says Ramit Sethi, author of I Will Teach You to be Rich. If you don’t understand, ask your adviser to explain further.
Worried about fees? Request a detailed list of all charges, including trading or annuity fees, says Laura. He jokingly refers to this as the "birds and fees" conversation because it often feels so difficult to discuss. But it shouldn’t be hard at all, he says.
Your adviser should be able to spell it out clearly. Finally, keep your adviser posted on significant life changes — anything from a divorce to a health issue to a job loss, says Balcom. "Your portfolio should evolve over time based on your needs, and your adviser needs to know if things change," he says.
Manage your expectations.
A handful of Balcom’s clients will call and complain when the market goes down and their portfolio heads south — then call and complain later when the market is up and their return doesn’t match the benchmarks, he says. "They want to be in when the market goes up and out when the market goes down."
The best way to contend with the inevitable ups and downs, he says, is to have a well-diversified portfolio.
Remember: It’s your money.
In the end, says Siegel, "It’s your money, not theirs. They advise and you decide." If your adviser is sidestepping your questions or making moves you find too risky or that you specifically asked your adviser not to do, it’s time to find a new one, says Laura. Or, even if your adviser acts in good faith, you may conclude that you would feel more comfortable working with someone else.
If your disagreements are more than occasional, that may be a sign it’s time to move on. "It’s normal to disagree with your financial adviser, but it’s not normal to disagree regularly," says Sethi.
Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
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