Assume for the moment that you have been having chronic back pain. When you visit your doctor he tells you that you need back surgery. Most of us would be inclined to seek out a second opinion. In fact, for many patients, it has become a routine part of the medical process: Get a diagnosis or treatment plan and then seek a second opinion.
Now what if the situation involved your financial advisor with respect to your financial plan instead of your doctor regarding your health? Would you simply implement the plan without getting another opinion?
We believe that it’s as critical to your financial health as it is to your physical health that you get a second opinion.
Now that the election is over, it is an ideal time to get a second opinion and see how your portfolio is positioned for the next four years. Here are some things to keep in mind when seeking financial advice:
Know What You Want
With respect to a second opinion, you will want to ask:
What will I leave the appointment with?
How is what you are recommending different from what I currently have?
How are you compensated for your advice?
Know Who You Are Working With
None of us would go to a pharmaceutical salesperson and expect to get unbiased medical advice. Pharmaceutical salespeople earn their living selling drugs. Yet, why do we think that if we go to a financial advisor who makes their money selling investments we should expect to receive unbiased financial advice from them? We recommend that you seek out a “fee-only” financial advisor who is held to a fiduciary standard.
Just as you wouldn’t expect a surgeon to perform surgery without knowing your entire medical history, you can’t expect to receive quality financial advice if you are not willing to disclose all of your financial information. In fact, transparency on the part of both you and your advisor is the cornerstone for a successful professional relationship.
Not a One Time Event
None of us would visit our doctor once and then conclude that our health will be fine if we simply follow our doctor’s advice from that one visit. At the very least, we will visit our doctor for an annual physical. The same holds true with respect to your finances. Your life changes and your plan will need to stay updated.
Whether you’re dealing with your physical or financial well-being, it’s always prudent to get a second opinion. Please visit us at Encore Wealth Advisors to learn about our second opinion service.