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It's not up to clients to protect themselves from irrationality: Advisor

It's not up to clients to protect themselves from irrationality: Advisor

Finance
Recent stock market swings in and out of correction territory despite overall good economic news have reminded investors that such wild volatility is always a possibility. While experienced financial professionals generally take such developments in stride, how can their clients protect themselves from their own emotional reactions?The best way to avoid irrational decisions as an investor is to turn off the financial news, said certified financial planner Rick Waechter, founder of Old Peak Finance."Investing requires a long-term view," he said. "The news is by definition short-term, and there is no way to reconcile them," he said.Waechter said that, at most, investors should look at their accounts monthly — and preferably less often. "Every six to 12 months, consider rebalancing ... to get
Your friend recommended a financial advisor to you … Now what?

Your friend recommended a financial advisor to you … Now what?

Finance
Investors looking to evaluate potential financial advisors can avail themselves of many lists of sample questions, such as those suggested by the Financial Industry Regulatory Authority, for interviewing practitioners. But just how to interview references, as is frequently suggested, is less clear. What kinds of questions should a reference expect?"Getting a reference from a friend or peer is a great place to start," said Scott A. Bishop, certified financial planner and partner with STA Wealth Management. "But many [references] have a great 'feel' about the person, but not the qualifications or references."More from Advisor Insight:The bad things people do with 401(k) plansWhat sort of insurance do you need?Most consumers confused about credit, debtBishop said the first thing you should ch...
Advisors are offering ‘fatally flawed’ advice to clients, advisor says

Advisors are offering ‘fatally flawed’ advice to clients, advisor says

Finance
If you're a financial advisor who is still giving clients advice based on today's life expectancy and goals, chances are you need to go back to the drawing board."Most of the advice you are offering is fatally flawed, and I would even argue criminally negligent," Ric Edelman, founder and executive chairman of Edelman Financial Services, told attendees at the Technology Tools for Today Advisor Conference in Fort Lauderdale, Florida, on Wednesday."If you continue to give the advice to your clients that you are currently giving them, you will soon be out of business," Edelman said.Rapid technology advances coupled with changing life plans will fundamentally alter the way we live. And most of the financial plans that advisors come up with for clients are stuck on outdated expectations, said Ed...
Watch out for this red flag when paying your financial advisor

Watch out for this red flag when paying your financial advisor

Finance
You may not be paying close enough attention to fee transparency while working with your financial advisor, and it could be costing you big time."High fees, compounded over a long period of time, can be more than the performance of the actual investment that you have," said Ron Carson, founder and CEO of the Carson Group.Mutual funds are an example of this, Carson said. You may see the management fee that you're paying, but not the supplemental fees that can run as high as 1 percent to 1.5 percent.You can proactively address this situation in two ways, according to Carson.More from Investor Toolkit:Advisors turn to life coaches and counselorsRetirees leave $ 100B in Social Security benefits on tableHow much those advisor fees are costing youFirst, demand that your financial advisor disclos...
Worried about online fraud? Make sure your financial advisor is ready for a cyber attack

Worried about online fraud? Make sure your financial advisor is ready for a cyber attack

Finance
Cyber theft is the fastest-growing crime in the U.S., and cost the global economy more than $ 450 billion in 2016, with more than 2 billion person records stolen.By 2021, cyber crime damage costs could hit $ 6 trillion annually, according to Ernst & Young's 2016-17 Global Information Security Survey.And companies are experiencing larger breaches, reported IBM. The average size of data breaches increased 1.8 percent in 2017 to more than 24,000 records, according to its 2017 cost of data breach study.Financial advisors are increasingly aware of this threat, with 81 percent saying cybersecurity is a high priority. Yet, just 29 percent say they are "fully prepared to manage and mitigate the risks associated with cybersecurity," according to a study released last September by the Financial ...