9 Way the Wrong Financial Advisor Can Wreck Your Life’s Work
Many things can go wrong if you don’t have professional advisors. You or someone in your family, such as your spouse or a child, could become seriously ill, experience serious health problems or even become a drug abuser. Your business could fail. Your investments could go bust. Your money could run out overnight. You may be forced to drain your bank account and sell all your valuables. Or your identity may have been stolen by irresponsible people. You may have major debts. Your relationships are ruined. The future is uncertain.
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To avoid cases like the ones above, you will certainly need financial advisors who can help you manage your finances as the owner of high net worth. A financial advisor will help you in managing your investment accounts, become professional financial planners, plan retirement savings, make tax planning. The best financial advisors will provide the best investment management services to you as a client who needs advice from an expert.
If you are a person with a high net worth and want to invest between $5 million and $500 million and need advisors, we urge you to download and read this in-depth book first.
Choosing financial advisors certainly cannot be arbitrary. Not all financial advisors can help you manage your wealth properly. Usually, we will choose financial advisors near us, assuming they already understand the financial activity in our area.
Choosing the wrong financial advisors can get you in trouble. Like excessive investment, starting a business without considering the pros and cons. To choose a credible financial advisor, of course, you have to look at their expertise level and reviews in your location in the US; Pillar Wealth Management and the team are ready to be your professional advisors to accomplish your list of financial goals.
This article will guide you to choose the right advisors that are certified financial planners. Why? Because the wrong advisor can lead you to business failure.
There’s nothing wrong with having different financial advisors that provide you with different services. You can even invest with different firms as long as you have enough assets to do so.
Financial advisors can move funds between your bank account and a third-party custodian and withdraw fees from your investment account. Qualified custodians are regulated by the SEC.
Financial advisors fail because of the steep learning curve and the difficulty in finding new customers. New advisors often suffer from stress and fail in the first three years of their career.
Less than 20% of financial advisors are still in business after five years. Those who fail are unable to acquire and retain customers and do not have an effective value proposition.
Financial advisors struggle with stress, burnout, lack of self-confidence, meeting client expectations, direct communication with clients, and regulatory requirements.
About 80–90% of financial advisors quit within three years. Successful advisors accumulate a large customer base, provide excellent service, and meet performance goals.
If you aren’t happy with your advisor, think about what’s wrong—where are your needs not being met? Then, with careful research, find an advisor who can provide what you need.
People leave their financial advisor because the advisor has set unrealistic expectations for performance. The advisor may not be a good fit emotionally, and communication may be poor.
A successful financial advisor must be a good salesperson in a high-risk environment. It can be difficult to acquire and retain customers, while losing customers is often due to poor communication.
You have a good financial advisor if she or he is meeting your performance expectations. Your advisor is someone you can trust, who also communicates with you regularly to update your financial plan.
1. Poor Returns from Too-Conservative Investments
Many high net worth investors got rattled by the Great Recession from 2007 to 2009. Many lost 30%, 40%, or even more of their total net worth in just a year or two. A similar trend occurred during the dot-com bust eight years earlier. Unfortunately, emotions are terrible investment guides.
We have encountered numerous clients and potential clients that contact us, who lost big in some previous bad bet, such as a hedge fund that failed to deliver on its vague but alluring promise. Without any financial planners, they responded to those losses by swinging the pendulum too far in the other direction and setting up ultra-conservative asset allocations.
Some people exited the stock market and never returned. Their businesses failed and they fell into big debt. Some earned just 2-3% when they could have been earning three, four, or five times that – easily. They ruined their future because they thought they didn’t need any financial advisors or certified financial planners.
Many affluent investors lost out on millions due to fear and overly cautious investments, without any experts or professionals financial planners working with them. They assume, “I can handle it,” or “I’m not going to lose 40% of my money again.” This is a positive mindset but wrong at the same time. Your business does need help from professionals advisors. Contact us for further help.
2. Excessive Investments with No Financial Planner
When all is well, most clients do angel investing and hedge funds because both are 100% equities. This is supported by the stock market condition, which has continued to increase over the last ten years. They then assume that they will continue to buy more. They do not think about or consider the bad effects that can happen at any time.
Whereas the greater the risk, the higher the likelihood of catastrophic failure. They continue investing more without considering the pros and cons and without help from professional advisors. This is why sometimes we’ve had clients come to us after losing 70% to 80% of their entire net worth due to poor financial planning. They think they don’t need guidance from professional advisors.
When selecting a financial planner and choosing the right advisors, the stakes are extremely high. That’s why seeking sound, objective investment advice from professional financial planners who have seen the market’s euphoric highs and lows is one of the wisest moves you can make.
To talk about the specifics of your situation and how Pillar Wealth Management may be of assistance, schedule a chat with CEO and co-founder Hutch Ashoo; we will give you access to our professional financial planners and other services.
3. Wrong Advisors can Lead to Poor Asset Allocation, with Higher Risk, Lost Opportunities
It’s not easy to choose the best asset allocation. You can’t just choose from a menu that ranges from “Aggressive Growth” to “Conservative” and call it a day. This is why it’s referred to as wealth management. Your asset distribution will change over time.
It will adapt as your financial realities, and life situations change over time. What works when you’re 40 won’t work when you’re 50 or 60 or 70. Goals and priorities change, plans change, and family situations change. Even your business now may not be needed in the future. It would be best if you had guidance from professionals advisors to adapt quickly.
Choosing the right financial advisor could be hard. Not every financial advisor is a certified financial planner. They might offer you a service that doesn’t suit your needs. Maybe they are only interested in the assets you have and they steer you into the wrong investment choices. You can easily fall into perilous waters if you do not work with professional financial planners who can build a personalized strategy that adapts to these developments as they occur, not five years later. Save your assets and business now with the right advisors’ team.
You should hire financial advisors. Financial advisors typically charge $1,500 to $2,500 to develop a complete financial plan or about 1% of total assets for current portfolio management. Of course, fees and current services vary from one advisor to another.
4. No Advice for Financial Security
The wrong financial advisor might ask you, without any context, meaningless questions like “How would you feel if you were to lose 20% of your portfolio’s value?”
The right financial advisor will create a plan that relies on built-in safeguards to greatly reduce the likelihood of suffering unacceptable losses. All financial plans are not the same! Not even close. Likewise, all financial advisors are not using the same basic methods and principles. It would be best to have the right advisors that give you access to their best services.
Is your advisor following a comprehensive, data-driven approach to ensure your long-term financial stability and the fulfillment of all of your greatest lifestyle aspirations and desires? If yes, then they are the right advisor. The best advisor would have a process in place to do this. They will help you map a path with your financial requirements and focus on your goals.
When you demand a detailed explanation of how they can safeguard your money and protect it for all of your ambitions and generational aspirations, the wrong advisor will most likely scratch their head. If you need any help or advice from the best advisors or have questions about anything related to business and finance management, get started now and schedule a chat with CEO and co-founder Hutch Ashoo.
5. Investments Fail with the Wrong Financial Planners
This is the ultimate cost of choosing the wrong financial advisor. It’s one of the greatest fears of nearly every ultra-high net worth family: Being forced to downsize because of investments or business failure. Having to cut back from deeply held plans and dreams due to declining financial conditions.
Imagine being told by a sheepish 30-year old advisor who takes over your brokerage firm account when you’re 67 and ready for retirement that it looks like your wealth may run out before you turn 85 unless you make some serious adjustments.
Imagine losing 70% of your wealth when you’re 60 because of an ill-advised investment and finances strategy and an “unexpected” recession. Unexpectedly, your business failed. As if any of them have been expected. Of course, you who are already in retirement no longer have the time to manage things like this.
This can happen if you end up with the wrong financial advisor. It is best considering to talk with the best financial advisors. Some financial advisors charge a fixed fee or hourly fee. But some charge fee-free for consult service only. It depends on their services and terms.
Find out if Pillar Wealth Management is the Right Financial Advisor for You
4 Things that Can Go Wrong After You Die – with the Wrong Financial Advisor
Ordinary people sometimes say they don’t care what happens after they die. But as part of the high net worth community, you know that’s a lie. When pressed on it – everyone cares what happens after they die – especially to the people they care about most.
The difference is, your wealth has put you in a position to make concrete plans that can continue bearing fruit decades after you’re gone. But with the wrong financial advisor, your best-laid plans will fall far short of what you envisioned and desired for your wealth.
Here are four things in particular that can inflict great emotional stress on your heirs after you’re gone.
1. No Tax Planning
Have you ever looked into the staggering amounts of money that can be saved through smart estate planning? You can pay tax many times more than you should with wrong wealth management for ultra-high net worth families. Yes – this is that serious. Here are three tax minimization strategies for ultra-high net worth estate plans
2. No Access to Your Records
With poor planning, your heirs can be locked out of your financial records and have to jump through time-wasting hoops to regain them. Without proper planning, you’ll be saddling your heirs with stress as they try to pick up the pieces. Without having access to your records, they need to review their finances again from zero. That way, they will spend a lot of time needlessly.
Meanwhile, they’ll likely have to spend some of your remaining funds paying a certified financial planner to help them – costs that could have been avoided with the help of a good financial advisor.
3. Wasted Time in Court
With no proper planning, there is a chance in the future that your heirs will waste many hours in court to manage some legal documents that you may miss. Of course, they will need to pay some money to get through these requirements and likely come out with less money than they should have when the process finally wraps up. It would be best if you thought about this side.
To avoid this in the future, you need to act now. You should make plans to give control of your estate to someone with a proper planner when the time comes. The wrong financial advisor might figure you’re taking care of this sort of thing on your own due to a lack of interest. They will keep looking at your investment performance, considering that to be the primary focus of their job.
4. The Wrong Persons are Your Future Heirs
Maybe you did create an estate plan or hire professional advisors ten years ago. But what has happenend since then? What if one of your children got divorced and lost custody of their kids, but your original estate plan allocated large portions of your estate to those grandkids. What if your heirs don’t have any interest in your finances? What about a sibling who dies early or a divorce of your own? What if someone in your family got richer? Will that change how your wealth is allocated after you die?
The wrong financial advisor may not think about this and even assume that it is not part of their job. They don’t include this in their services. Your planner needs to have a mindset that making a financial plan is not a one-time event. Financial and investing planning is a continuous process. These services from your planner must evolve based on your needs.
Who Determines the Growth, Security, and Preservation of Your Wealth and Investments?
It’s not you. It’s not your spouse. The person with the greatest influence on how much of your wealth stays in your family before and after you’re gone is your financial advisor. The person with the greatest influence on how your wealth grows and prolongs itself throughout your lifetime will be your financial advisor. If you don’t have advisors, you are setting yourself up to lose millions.
Unless you already are an investment planning expert (and very few are – you have other things to do with your time), you probably don’t have the skills to do this as well as it needs to be done if you expect to achieve and exceed all your short and long term financial and lifestyle goals.
• Your financial advisor creates your investment plan.
• Your financial advisor manages your portfolio.
• Your financial advisor preserves and prolongs your wealth.
• Your financial advisor ensures your heirs are treated according to your wishes.
If you don’t have one, you have the wrong one; none of these things will happen to the degree they should.
• Stress will increase.
• Money that shouldn’t have been lost will be lost, wasted, and taxed.
• Time will be wasted on things that should have been taken care of.
• Investment growth that should have happened will fall short.
• Financial serenity that should have been enjoyed all the way through to the end will remain an unfulfilled dream.
• Spouse. Kids. Financial advisor.
That’s the order of the three most important people in your life. Everyone knows what can go wrong if you choose the wrong spouse. And everyone knows what happens if your kids don’t turn out as you hoped.
Hopefully, after you read this, you realize the stakes of choosing the wrong financial advisor. To see if Pillar Wealth Management is the ultra-high net worth financial advisory firm that’s right for you, schedule a chat with CEO and co-founder Hutch Ashoo by clicking here.
How do I find a good financial advisor?
Is hiring a financial planner worthwhile? It’s a huge choice to decide whether to hire a financial planner to handle your savings. A long-term partnership with a financial planner or investment adviser is not required for everybody. However, many clients who may profit from consulting with a wealth manager either do not pursue professional advice or believe they do not need it. The best financial advisor will have the best interests of their clients as a primary consideration. Finding the best financial advisor can help you avoid unnecessary costs and focus on goals. To find the best financial planner for your needs, follow these guidelines.
Determine which parts of your financial life need assistance and what services you need
Decide which parts of your financial life need assistance before speaking with a financial planner. It would help if you were prepared to explain the specific money management needs when you first meet with an expert. It’s important to remember that the best financial advisor does more than provide investing advice.
Know The Types of Financial Advisor and Fee
Understanding fiduciary obligation is an important part of learning about the many forms of advisors. Some, but not all, financial advisers are bound by fiduciary responsibility, which means they must financially act in the best interests of your needs. Regardless of the kind of advisor you chose, make sure you understand how they make money.
Originally, the financial advisors paid a proportion of the money they handled for you as a premium. Advisors also deliver a range of fee structures, making their advice more available to people of all financial backgrounds.
Seek financial advisors with a strong track record
There are many ways to find a financial advisor who suits you the best. But first, the best financial advisor must have either Certified Financial Planner or a Personal Financial Specialist designation. You need to know what designation and professional certificates they have and licenses.
Remember the advisor’s qualifications and their backgrounds and fee arrangements when considering them. Also, just because someone belongs to a financial services organization doesn’t mean they’re a fiduciary financial planner. And one of the best financial advisors you can get is Pillar Wealth Management. Pillar Wealth Management is an investment advisory company dedicated to assisting clients with achieving long-term financial success.
5 Reasons Why Financial Advisors Fail
You’re passionate about being a financial advisor, and you’re looking to maximize your success. Consider the following reasons why you may fail.
1. Poor Process
Growing your business takes time, and you need to make time to focus on that growth.
Consider your daily routine and the tasks that you need to accomplish every day. Each of these essential tasks needs an efficient process that uses the least amount of time and energy to accomplish.
For example, you need a process for implementing your customers’ financial plans to ensure you are meeting the needs of your current client base. You need a process for answering calls and emails and for any of your other job responsibilities.
To grow your business, maximize the efficiency of your daily routines so you have time for finding new prospects, following up with prospects, and onboarding new clients.
2. Failure in Prospecting
Prospecting is difficult, which is why you need to spend some portion of your day prospecting — every day. Your business will not grow without consistent effort to acquire new customers.
With time and effort, you will develop a prospecting method that yields the results you want. Social media and digital marketing can be used as prospecting tools.
Train yourself to work on prospecting during the time you’ve allotted to that task. Start with calling the first person on your list.
Invest in building your professional network on LinkedIn. Get involved in your community to connect with potential clients.
3. Lack of mentorship
Financial advisors who work for large investment firms have the opportunity to work with finance experts who can share their knowledge with less experienced staff.
A mentor can be a valuable source of assistance for growing your business.
It should be fairly obvious to you which advisors are willing to help you make progress in building your customer base. Be clear about your needs, so you don’t waste their time, and be ready to help them in return.
4. Lack of market focus
Many financial advisors fail because they don’t have a market focus. Their focus is too general, without a target market.
Understand which markets are appealing to you and study those markets. For example, you may want to target manufacturing or transportation—but not if that market doesn’t interest you. You need to care and show enthusiasm for your potential customers and what they do.
Study the target market you care about to determine its earnings potential. Is your target market growing?
Finally, make sure you have the resources you need to serve new clients.
5. Lack of preparation
Not having enough information about a prospect can kill any conversation. Use the internet to get as much information as you can about your prospects, such as their background, education, and personal interests.
This information may not be enough. To boost your information database, consider working with a marketing firm that specializes in finding prospects. Investing in CRM software, such as Salesforce, is also an option. CRM systems give advisors essential information for cultivating prospects.
To be 100% transparent, we published this page to help filter through the mass influx of prospects, who come to us through our website and referrals, to gain only a handful of the right types of new clients who wish to engage us.
We enjoy working with high net worth and ultra-high net worth investors and families who want what we call financial serenity – the feeling that comes when you know your finances and the lifestyle you desire have been secured for life, and that you don’t have to do any of the work to manage and maintain it because you hired a trusted advisor to take care of everything.
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