Time to review your investment strategy for the year

As the year draws to a close, it’s a good time to review your progress toward your financial goals. But on what areas should you focus your attention?

Of course, you may immediately think about whether your investments have done well. When evaluating the performance of their investments for a given year, many people mistakenly think their portfolios should have done just as well as a common market index, such as the Standard & Poor’s 500. But the S&P 500 is essentially a measure of large-company, domestic stocks, and your portfolio probably doesn’t look like that – nor should it, because it’s important to own an investment mix that aligns with your goals, risk tolerance and return objectives. It’s this return objective that you should evaluate over time – not the return of an arbitrary benchmark that isn’t personalized to your goals and risk tolerance.

Your return objective will likely evolve. If you are starting out in your career, you may need your portfolio to be oriented primarily toward growth, which means it may need to be more heavily weighted toward stocks. But if you are retiring in a few years, you may need a more balanced allocation between stocks and bonds, which can address your needs for growth and income.

So, assuming you have created a long-term investment strategy that has a target rate of return for each year, you can review your progress accordingly. If you matched or exceeded that rate this past year, you’re staying on track, but if your return fell short of your desired target, you may need to make some changes. Before doing so, though, you need to understand just why your return was lower than anticipated.

For example, if you owned some stocks that underperformed due to unusual circumstances – and even events such as Hurricanes Harvey and Irma can affect the stock prices of some companies – you may not need to be overly concerned, especially if the fundamentals of the stocks are still sound. On the other hand, if you own some investments that have underperformed for several years, you may need to consider selling them and using the proceeds to explore new investment opportunities.

Investment performance isn’t the only thing you should consider when looking at your financial picture over this past year. What changed in your life? Did you welcome a new child to your family? If so, you may need to respond by increasing your life insurance coverage or opening a college savings account. Did you or your spouse change jobs? You may now have access to a new employer-sponsored retirement account, such as a 401(k), so you’ll need to decide how much money to put into the various investments within this plan. And one change certainly happened this past year: You moved one year closer to retirement. By itself, this may cause you to re-evaluate how much risk you’re willing to tolerate in your investment portfolio, especially if you are within a few years of your planned retirement.

Whether it is the performance of your portfolio or changes in your life, you will find that you always have some reasons to look back at your investment and financial strategies for one year – and to look ahead at moves you can make for the next.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

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Source: http://clarksvillenow.com/local/time-to-review-your-investment-strategy-for-the-year/

Looking to Hire a Financial Advisor?

Are you thinking of hiring a financial advisor to help you with your money? Full disclosure, I’m not, obviously, because I am one.

 

I’ll tell you this, though… Coming from someone who’s been in this industry for over a decade, if I was looking to hire a financial advisor there are a few questions I would need to have answered in order to feel comfortable about trusting one with my hard earned money especially since there can be risk involved in investing.

Any way you slice it, the idea of moving your life savings from one financial advisor to another, or the idea of trusting someone and working with someone to help you build your nest egg is a major decision that should not be taken lightly.

Taking the wrong type of advice to heart or making certain types of mistakes could end up costing you a lot of money over the course of your saving and investing career.

I want to help you avoid doing that.

Let’s pretend (just for a few minutes) that I’m looking to hire a financial advisor, I’ll tell you exactly what I’d be looking for if I was…

First things first, only work with someone you feel good about being connected with and working with.

I always say this is kind of a no-brainer. If you’re looking to feel good about the direction your money is moving and what choices you make, it’s important that you have a solid working relationship with your advisor.

The connection I’m referring to is made up of a few elements…

Trust: I think it’s important to most people to feel like your advisor is working in your best interests and being honest with you. You want to know that if you ask a question it’ll get answered and that if you have a concern it’ll be resolved.
After all, you’re trusting your future with someone and you should make sure you feel like they’re worthy of that kind of responsibility.

Communication: Whoever you decide to hire to work with your money, I would definitely make sure you feel comfortable communicating with them.
I always say it’s a good idea to discuss your expectations with a potential advisor up front. If you want to speak to them weekly, tell them. If you only want to hear from them once a year, tell them.
If you normally get nervous and feel offended when you don’t get a voicemail or email returned by your advisor within 24 hours, let them know up front. If you can come to an understanding about the best way to communicate up-front, it could save you a lot of frustration over the long-term.

Respect: This one kind of goes hand in hand with trust, but you have to respect the ideology of your financial advisor.
On the same token, your advisor better be in a position where they respect your ideas and the expectations you have for your money.

It’s not a REQUIREMENT that you love your advisor (I hope you do), but if you can’t stand sitting in the same room with them or you feel like you have to second-guess their knowledge (or lack thereof) this could turn into a bigger issue later than it is now.

Working with a financial professionalthat you don’t have a mutual understanding of respect with is a slippery slope that can breed resentment and a lack of communication when it comes to your money.

Ask Them if They’re a Fiduciary

Fiduciary: Being legally and ethically bound to act in another’s best interests.

You may not know this, but not all financial advisors are legally required to work in your best interests when it comes to managing your money, offering you financial products, or creating financial plans for you.

One would think that when it comes to working with your money all advisors would do what’s best for their clients 100% of the time but that’s simply not the case with all financial advisors. In fact, you may be surprised to know that there are a lot fewer advisors truly acting as a fiduciary for their clients that those who actually ARE acting in this capacity for their clients.

Recently, the Department of Labor has passed (and is in the process of passing) the Fiduciary Rule into effect. This is a piece of legislation meant to keep consumers in the know when it comes to who’s really working with their money and to disclose and highlight the different conflicts of interest that may be taking place with some types of financial professionals.

Now, any financial professional who works with your IRAs, 401(k)s or any other qualified retirement account is considered to be a fiduciary. Unfortunately, this same level of care is not required for money other than these qualified retirement accounts, unless you’re working with an advisor who maintains the fiduciary standard of care at all times.

Not to get into TOO much detail here, but I think this is BIG for the industry.

Prior to the passing of the rule, a lot of financial professionals have worked for their clients on what we call a “suitability standard”. This means they are only held by the standard to what is “suitable” for their client’s financial situation.

This means that they can offer you products and recommendations that may be “suitable” for you. This is OK, but things like commissions paid to brokers, fees charged by financial institutions for managing money and also incentives that certain companies provide to brokers and advisors may not need to be spelled out and compared across products in plain English for you so you can truly decide what makes the most sense for you.

Transparency: Clear, easy to see through, not containing anything that would obstruct your view.

I believe advisors should have a transparent and open platform for their clients. This means that they should disclose all fees, commissions, and conflicts of interest with their clients up front prior to doing business with them, collections fees from them, and receiving commissions from them as well.

I also believe advisors should ALWAYS be held to the Fiduciary standard, not just when dealing with qualified retirement accounts like IRAs and 401(k)s.

If I were looking to hire a financial advisor, knowing what I know now (and what I’ve seen in the 10+ years I’ve been helping people plan with their money), I would seek one out that’s been acting as a fiduciary for their clients for the majority or all of their career, not someone who is scrambling to adjust to the changes in the industry as they happen. I would be looking for an advisor with a track record of doing what’s best for clients because of who they are, not because of new rules that force them to change.

Are you thinking of interviewing a potential advisor? Ask them what they think about the new law, and ask them how long they’ve been officially acting as a fiduciary for their clients.

If your prospective financial advisor seems confused by any of those types of questions, just ask to see their form ADV 2 brochure– that’s a document that investment advisors are required to give to their clients if they solicit business from them, get your hands on that document and read for yourself.

If your advisor doesn’t have an ADV 2 brochure then they most likely work for an insurance company or a broker-dealer and may not even be a real financial advisor (they could be what’s called a Registered Representative or just a life insurance agent). I’m not saying that’s a bad thing, but I would personally feel safer working with someone that was required to tell me everything about their business in writing before we did business.

Figure out if you’re potentially working with a broker-type advisor or a planning-type advisor

There are a few different types of financial advisors out there.

A broker-type advisor is mostly focused on selling and managing investments or other financial products for their clients for their clients.

A planning-type advisor focuses on putting together financial plans for their clients by running the numbers and doing the math to achieve specific financial goals like having a certain amount of income in retirement or helping you prioritize when to make certain financial decisions.

If you can find an advisor that offers brokerage services and also financial planning, you may get a more holistic approach to your money by doing that if it’s important to you.

It pays to have a plan (about getting a plan)

This is a big decision. Take your time when you interview an advisor, make sure you feel comfortable with who you’re working with. Understand that there is no “perfect” advisor out there, but taking the time to find and work with a financial professional that you feel good about working with can definitely pay you dividends in peace of mind throughout your lifetime.

 

 

SOURCE: http://www.theartofaplan.com/hiring-a-financial-advisor/

Personal Finance: What to Ask a Financial Adviser

Financial advisers and planners attend seminars and classes and read books so they can learn how to win your business or, if you’re already their client, to “deepen the relationship.” The customary procedure is for the adviser to ask you questions, orally and in writing, and for you to reply. Then the adviser considers the facts and tells you what he or she thinks.

But when you decide it’s time to hire (or replace) a financial adviser, it is a two-way street. Are you also prepared to be assertive? You should be. Whether you’re working with a financial planner on general big-picture matters or an investment manager who will actually handle your money, you are retaining these people and their organization to work for you.

This may cost you as much as 2 percent annually of your total assets that the adviser manages—probably more than you’ve had to pay an accountant or a lawyer. So there is no reason to be shy or to hold back in any introductory session.

Tell the planner or broker or investment manager—in a genial but matter-of-fact way—that you would like him or her to answer a series of your own questions in writing. If you run into resistance, or learn something troubling, take your business elsewhere.

This proactive, “educated consumer” approach doesn’t play well with all planners. After Kiplinger’s Personal Finance magazine chronicled one family’s search for an adviser—a year-long process that included a thorough if somewhat cheeky questionnaire prepared by the investor—one planner wrote to the author rather indignantly about his praise of this approach.

The planner said the questions should have been “How old are you?” and “What school did you attend,” and then the more pertinent, “What are your other clients like?” The first two are irrelevant, as long as the adviser has recognized professional credentials and a clean record.

On the third point, yes, if all the other clients are older and richer, or younger and with less-complex affairs, that’s a fair warning. You could end up as an afterthought to the adviser, the equivalent of being seated at the darkest table next to the kitchen or the last client to get a call returned.

So what questions should you ask?

The AARP has a sample financial-adviser questionnaire, but it is overly weighted with bureaucratic matters such as “Are you a registered investment adviser?” (not all planners are, and anyway, it doesn’t make one competent) and “Have you ever been disciplined by the Securities and Exchange Commission (SEC), the National Association of Security Dealers (NASD) or other regulator?” That’s important to know, but you don’t normally start by asking a professional if he or she is a crook. Perhaps there’s a regulatory blemish, but with extenuating circumstances. Better to talk this subject out.

In all seriousness, many advisers are receptive to being interviewed. They have an incentive to get off on the right foot with you or any other prospective client. So concentrate on the nitty-gritty: the cost, the investment performance, the type of investments the adviser favors or is most expert about, and the way the practice operates to serve you.

There’s also the issue of whether the adviser is a fiduciary (which means your interests legally come first) or a broker, which puts the pro in the awkward position of trying to improve your finances while owing primary legal allegiance to an employer, who may have sales quotas and other rules designed, first and foremost, to boost its profits. These are the areas you want to explore in your interviews and questionnaires.

First : The Fees

There are all kinds of arrangements on how you pay an adviser. Fee-only financial planners charge by the hour, but they may also bill a percentage of your assets if you retain them to provide hands-on investment advice such as to design a portfolio of mutual funds.

Others charge a combination of fees and commissions. So it’s key to ask the adviser to provide you with a written breakdown of all fees and commissions, how they are figured, and which ones are fixed and which ones are variable.

You can also ask how these charges compare to industry benchmarks. (One percent of total assets is fair; 1.5 percent is high although common, and more than that is too much.) After all, many no-load mutual funds have low expenses, but if a planner charges you several thousand dollars to assemble a simple mix of index funds and then takes a cut of your balances when there’s little or no management required, you’re wasting your money. Someone else might merely charge you $750 to take five hours to evaluate and reconfigure your investments and to update you every quarter. If you need additional advice, you can pay as you go.

Next : The Performance

This is a tough one because the timing of investments determines the performance.

When an adviser makes claims— which they sometimes do on their Web sites or in brochures—that other or “typical” clients have earned, say, two percentage points a year more than the S&P 500 over a long period, you need to see objective evidence.

This result is plausible, but you might engage the adviser on the subject of this “track record” by saying, “I know you have experience and credentials, but can you show me how exactly you have delivered this sort of return?” You’ll at least get a sense of how the adviser expects to add value to your portfolio—at least enough to cover his or her fees. (Remember, you can always solicit advice at a low cost from Vanguard or Fidelity, as long as you’re content to use their mutual funds for most of your investing.)

The adviser may respond by introducing the idea of risk-adjusted returns, explaining that an 8 percent long-term return with low volatility is better than 8 percent with considerable ups and downs. Again, ask the adviser to tell you how he or she controls the risk and rebalances or rethinks the investment mix to keep you out of trouble. Many fee-only financial planners are conservative and prefer index funds.

Brokers with large national firms may suggest you use separately managed accounts run by outside investment advisers. This costs more but gets you active management which, over time, could give you superior returns to the market indexes. If you don’t want indexing, this is the time to say so.

Service counts

Check out investment adviser and planner Web sites. You can locate them through random Googling, or consult association Web sites.

• NAPFA (www.napfa.org) is the National Association of Personal Financial Advisors, a group of financial planners who charge fees but not commissions.
• FPA (www.fpanet.org) is the Financial Planning Association, which includes planners of all sorts.
• IAA (www.icaa.org) is the Investment Adviser Association, whose members are wealth-management and advisory firms. Their account minimums tend to be high, often $1 million, but they will develop personalized portfolios for their clients and advise on estate planning, taxes and insurance.

All of these Web sites seem to promise superior or unparalleled customer service. But you need to determine just what this means. If you bring in $1 million, you’ll probably be assigned to a personal investment representative who will do everything but shine your shoes and fetch your laundry. That’s what you should expect, anyway.

But if you are one of 600 $100,000-clients of a two-person brokerage team, and you want individualized attention, be prepared to get to know (and get to like) the brokers’ young assistants, because they will be the gatekeepers. Then again, most advisers do not want to hear from you every time the market has a bad day or a bad week. Once you have an investment strategy in place, you should be patient.

So on this topic of service, you want to be specific: What kinds of summary statements do I get? What if I call suddenly with a tax or risk question? Do we have regular sit-down reviews, or do we make an appointment as if you were the dentist? Any or all of this can be acceptable, but make sure the arrangement is okay with all concerned.

Now : The Personal Stuff

Don’t forget matters of ethics and independence. With tens of thousands of financial advisers out there, you don’t want one who takes your money and “converts it to his own use,” which is regulator-speak for embezzling from the clients.

The National Association of Security Dealers (NASD) publishes a monthly list of enforcement actions against brokers and advisers, and some of the people they bust literally steal their customers blind. Fortunately, most advisers are honest.

The various regulatory bodies—Financial Industry Regulatory Authority (FINRA, (www.finra.org), the Securities and Exchange Commission (SEC) and state securities regulators —all have some version of a search engine through which, in theory, you can find out any disciplinary background on a registered adviser. Trouble is, the information is incomplete or limited.

Go to the SEC’s files (www.adviserinfo.sec.gov) and look for the dossier on a certain adviser who, let’s assume, is someone you’ve just met at a visit to a major firm such as Raymond James or Wachovia Securities. The SEC’s site won’t help much because the site is organized by firms, and the big firms are huge. Your best bet is the state securities agency.

If you’re looking at a small shop, the SEC works better. Let’s look up, for example, Brightworth LLC, an Atlanta advisory firm. You can read the Form ADV, the advisers’ periodic registration forms, and confirm that in the past ten years the firm has not been convicted of or charged with a felony or any misdemeanors relating to bribery, perjury, false statements and so on. You can go through the rest of the screens on this firm and find out how many clients it has, the assets under management, the kinds of fees charged (though not the actual pricing schedule) and more.

But the best source of information is full disclosure from the advisers themselves. Ray Padron, a partner of Brightworth, suggests three tough but fair questions he’s been asked by prospective customers:

1. Are you a fiduciary?

More and more, investors want to know if their adviser is literally on their side. There are good brokers and lousy advisers, but all things being equal, an adviser who is a fiduciary will work out better in a pinch.

2. How do you get compensated, including soft dollars?

Soft dollars refers to money or other compensation from investment companies in exchange for the broker recommending their products. It’s legal, but it’s not in your best interests. If you’re paying someone to advise you on mutual funds, his or her choices should be unbiased.

3. Could you tell me why the last two clients that you lost left you? And the last one you let go?

This is a relationship business, and if you aren’t happy, you’ll probably suffer financially. So find out where the possibility of a conflict arises. The answer could be as plain as people moving away or retiring. But there may be a pattern. The last thing you want is to hopscotch from one adviser or firm to another and another.

 

 

SOURCE: https://www.quicken.com/personal-finance-what-ask-financial-adviser

Broker: Should You Hire A Financial Advisor?

Read on, and check out NAPFA for all of your certified financial planner needs. NAPFA is not a sponsor, we just prefer to use them over their competition.

If you’re reading this article, you may be interested in finance, but just don’t know where to begin. You may be interested in investments, or you might just be lured in by my sweet by-line.

Let’s assume you are interested in investments. You’ve been working, you’ve saved some money, and you want to grow that capital and put that money to work. You want to invest, and aren’t sure where to start – whether that’s managing your own investments, or relying on someone else to do it. If the latter sounds more like you, then likely you’ve heard of the concept of financial advisors, who all are vying for the assets of individual people wanting to transfer their money management. Financial advisors typically work for companies that offer a buffet of financial services – including insurance planning, retirement planning, estate planning, and investment planning/management.

What the average person considering this approach needs to know is this: unless the financial advisor you hire is specifically adding value to you beyond simply “managing your relationship” with their company, you are with the wrong advisor.

To understand my argument, you need to understand the structure of many of these investment advisory companies. Broadly, the companies typically have a group of folks who serve as “Financial Planners”, who take the information that you provide them, and help generate a financial roadmap for you to achieve your goals. There are also “Investment Personnel”, which would consist of people serving on the Investment Committee, the Chief Investment Officer, and the Analysts. These are the people who are actually determining how to allocate the funds of the firm’s clients. Lastly, you have the “Financial Advisors”. As a client, this is your main point of contact. They are the person who calls to talk with you, and who you directly meet with periodically.

If you take nothing else from this article, then take away this: if that financial advisor does not help with one of the other roles (i.e. actively contributing to the investment process), then why are you paying them?

If you do decide to go the route of using a financial advisor, you need to realize that you will be paying fees for them to do so. Typically, companies will charge you each year a percentage of the assets that you have invested with them. Remember, these companies are running a business, and they are selling you their services. Not all fees are bad. But not all fees are created equally either.

Let’s first consider that basic yearly asset fee. Make sure you understand how that is divvied up. If a financial advisor isn’t willing to disclose where the money you pay them is going, then that is not likely a person you want to be in business with. Some of that money should be going to help the company run the investment management operations, which is good. But you need to be aware of how much of that fee is going to the advisor if they are merely meeting and talking with you, while the lion’s share of the true investment management work is being done by others.

Unfortunately, with the vast number of financial advisors in the United States that there are, there are likely many existing relationship structures that enrich the advisor without actually being a valuable asset to their client. Most of the time, financial advisors make a good living because of their share in the receipt of the asset management fee we just discussed. As an example, say a financial advisor makes 0.50% per year of the assets under management for his/her clients, and their total book of business is $100 million. Each year, as long as that book of business does not shrink, the advisor makes $500,000. That’s a lot of money. The benefit of capitalism is that those providing truly highly valued services can fetch high wages on the open market. But as noted above, a key question is whether or not they are actually providing that valuable service: helping your money grow.

Another factor to consider is this: if you are going to an advisor offering a full suite of service, how much time are they actively giving to manage each portion of your financial picture? Yes, the investments piece is just one part of the total picture for an individual. But it is a super important part that merits a VAST amount of attention and focus. Are you getting that from your advisor?

If the advisor is telling you that his/her investment committee is recommending the stock of company X, or mutual fund Y, that same advisor should be able to tell you WHY they are recommending that. Is it because they think the economy is improving, and this particular company has the factors in place in its business model to benefit more than other companies in an economic rebound? Is it because they think that the investment style of the mutual fund is ripe to outperform other styles? After all, if the advisor can’t answer these questions, then how can you view them as qualified to manage the investment piece of your financial picture?

If you find yourself in one of these situations, then don’t despair. There is hope, and there are other alternatives. Cutting out the “middleman type” of financial advisor will allow you to give money to a firm that specifically manages the assets, and does nothing else. There are vehicles like this out there.

Additionally, you could also begin to manage more of a portion of your assets yourself. Unless the advisor you are using currently provides you with specific stock selection insight, then there doesn’t seem to be as much point to having them on your financial payroll. If you are simply being put into a portfolio that buys a group of mutual funds, can’t you do that yourself? Yes, in fact, you can, and it will be cheaper. (Now, a caveat: managing your own assets requires attention to detail, research, and a willingness to learn. Successful investing is NOT rocket science – it’s a skill gleaned through practice and study.)

Finally, let me note that the other financial services offered by financial advisors are valuable. Considering insurance planning, tax planning, retirement savings, and other factors are extremely important services that anyone must consider in examining their full financial picture.

This article is not meant to downplay the value of financial advisors who truly service their clients as they are meant to do. If you believe this is the best way for your money to be managed, then focus on finding an advisor who is actively contributing to the investment process, keeps a low fee that is somewhat tied to how they actually perform in managing your money, as well as provides individual security selection. These advisors are worth their weight.

 

 

SOURCE: http://brocouncil.com/Finance/broker-should-you-hire-a-financial-advisor

THE VALUE OF A COACH

Remember the old saying, “You can’t see the forest for the trees”? Sometimes we get so caught up with the challenge at hand that we can’t see the solution that is staring us in the face.

Many times people find themselves facing financial choices. It is at these times that it is sometimes hard to determine which path to take. When faced with these financial choices, it is hard to see all of the variables and their consequences. That is why a financial coach can play a vital role in your decision making process. Having a coach that can help guide your financial life can prove to be your most valuable asset. A coach helps to bring focus to important issues and then helps to establish a plan with your financial goals and objectives in mind.

WHY HAVE YOUR OWN COACH WHO IS AN INDEPENDENT ADVISOR?

NO TWO PEOPLE ARE EXACTLY THE SAME

While there are many people who have much in common, no two are exactly the same. Your coach will help you establish a personalized plan of action which is focused on your goals, objectives and needs.

THEY HELP KEEP YOU ON YOUR TRACK

While there are those who claim to have an arrowed path that you can follow, “sounds good” is not an answer. Your personal financial coach helps you stay on track with your personal individual goals and objectives. They stay with you all the while, reinforcing the “why” and not just the “how” of what you are doing. You always need to remember, “If you don’t know where you are going, you’re liable to end up somewhere else”.

TALK TO A COACH

Go ahead… Contact us today and see how having a relationship with your own personal financial coach can prove to be your most valuable asset in achieving YOUR financial goals and objectives.

10 THINGS TO CONSIDER WHEN CHOOSING A FINANCIAL COACH

• Are they a part of a team of coaches which share the same beliefs and philosophies?
• “There is safety in the multitude of counsel”
• Does that team recognize and stay committed to the belief that, while I may have many things in common with other people they serve, I still need a plan that is as individual and special as I am?
• Does my coach have and use tools which will help the focus stay on my individual goals and objectives?
• Do they represent a variety of companies who offer the products and solutions I need?
• Are they state licensed?
• How many years of experience do they have?
• How have they continued to educate themselves in order that they remain relevant?
• How accessible are they when I need them?
• What are their areas of specialization?

 

 

SOURCE: http://www.balancedsolutions4me.com/new/balancedsolutions4me/content.asp?contentid=2017915573

Traditional Financial Planning

Traditional financial planning is the source of much of the distress that people feel in their financial lives today, the information from the Financial Services industry leaves most confused and bewildered? The perception is the industry is smarter than the rest of us. If someone really could accurately predict market movement on a consistent basis, what would be their motivation for telling you? Why is this the case when it seems so logical to hire a planner to escape our financial difficulties? The root of the problem lies in the way financial planning is carried out.

It is often used as a marketing tool to sell financial products. The reason you may ask? So they can generate transactional commissions on the recommendations. The individual working with the investment planner generally has little in the way of knowing whether the recommendations are in their best interest or the best interest of the investment planner themselves. They also have little way of knowing whether the products could have been obtained elsewhere at lower cost. The majority of financial planners actually work for a brokerage firm or a broker/dealer and don’t really work for the client.

 

“Who teaches the rules”? The traditional planning process does little to educate investors and help investors deal with the instincts and emotions that are at the core of  poor investment returns that they experience. How can you tell if your advisor is helping you avoid these problems? Simply take the “Investor Quiz” on our  website. Answering these questions, along with some coaching will help you wade through all the complex issues involved in the investing process. Regular coaching sessions, both one on one and as a group, can create peace of mind through education. Ultimately, investing is a people problem not necessarily a portfolio problem. The solution is a coach that will educate and enlighten, creating clarity and confidence. You do not need to know everything if you have a coach teaching you the few right things! There is not a lack of information in our society today, rather a lack of clarity.

 

 

SOURCE: http://www.faicoach.com/coaching-vs-planning/

Financial Adviser vs Financial Coach. What is the Difference?

Let’s be honest, we could all be doing a little better with our money. So who do we turn to when we need a little help?

Chances are you’ve already been offered a consultation with a bank financial adviser, perhaps even gone along to the meeting. But what did you learn, what habits did you change and did your future vision become any clearer?

In my role as a financial coach here at Wealth Enhancers I want the lives of our members to change for the better. Now, I’ve been a standard adviser, focusing on a portfolio and providing specific super, insurance and investment advice, but that didn’t sit well with me. It’s not client centric and motivational.

To me, the coaching side of the job is far more rewarding. And the rewards go both ways. For our members, the progression in wealth and mindset is phenomenal. For me, it’s about seeing that change and continually encouraging them to be the best they can be. It sounds a little cheesy, but seeing people living life on their terms is a wonderful thing.

So what’s the difference?

Financial coaching focuses on your education, growth, and decision making process, so that you master and understand wealth building skills. The coaching structure is designed to help you build wealth in the first place. You remain in control by learning how to manage your money, you will be smarter with the ongoing education and you will make better informed investment decisions.

Traditional financial advice models are built on a system and products that profit from the wealth already accumulated. The problem is that’s not what most Australians need. Most people want help accumulating the wealth in the first place.

Why do I need a Financial Coach?

Most of us know what we should do to build wealth and gain financial freedom. It’s no secret that we should spend less, save more, and invest smarter. I think we also understand pretty well how we should do these things. The problem is not in the knowing, the problem is in the doing.

It’s one thing to tell people what they should do, and it’s an entirely different thing for them to actually do it. People are complex, emotional and not always rational. The right strategy and accountability framework is what allows our members to grow and feel satisfied. A proven process to get rich slow, while allowing the individuals to grow themselves personally.

So if you’re looking for someone who’s going to follow your agenda, help create independence, foster accountability and responsibility, as well as educate and focus on your goals, then now is the time to reach out to a financial coach. We are enablers, client focused and objective driven.

 

 

SOURCE: https://medium.com/@wealthenhancers/financial-adviser-vs-financial-coach-whats-the-difference-and-why-it-matters-to-you-ca0e86859735

10 WARNING SIGNS YOU NEED A FINANCIAL MANAGEMENT COACH

Don’t let your finances spiral out of control, work with a coach instead. Wouldn’t it be nice for your money to work for you – rather than you for it?If you’ve ever found yourself wondering; “Where does all my money go?” or “Why does what I earn never quite seem to stretch as far as it needs to?” then you might want to consider coaching with a life or business coach who specializes in financial management. Learning to manage your own finances is one of life’s most important skills, yet it’s not taught at school or even at university (unless you study accounting – and even then the focus is on managing other people’s money).

Some people seem to naturally develop the skills to budget and make their money work for them. Many others do not. Even those who find it easy can find themselves struggling during moments of major life change, such as redundancy or retirement. Poor financial management can turn a great life into one beset with endless problems.

ARE YOUR FINANCES IN A FUDDLE? TAKE THIS SURVEY TO FIND OUT

Here’s a quick check list of warning signs that might mean your finances are slipping beyond your control:

1. Do you ever find yourself struggling to pay the rent or the mortgage?    Yes    No
2. Do you shop for essentials, like food and clothes, with a credit card?    Yes    No
3. Do you only ever pay the minimum payment on your credit card statement when it comes due each month?    Yes    No
4. Are you slipping further into your overdraft every month?    Yes    No
5. Have you ever had to go without essential items because you can’t afford them?    Yes    No
6. Are you earning well but have no savings?    Yes    No
7. 7. Are you skimping on a pension plan/401K because it seems too expensive?    Yes    No
8. Have you got a safety net in case of unforeseen expenses – which could be anything from a broken household boiler to medical bills?    Yes    No
9. Are you living from pay cheque to pay cheque?    Yes    No
10. Are you living in fear of another bill hitting the doorstep?    Yes    No

If you answered Yes to two or more of the questions above, chances are you could do with the help of a life coach to get some sound financial management coaching.

THE GOOD NEWS

The good news is that learning to manage your finances doesn’t have to be hard work. You don’t need to become an accountant, and you don’t need a degree in mathematics to make your money work for you.

Working with a financial management coach enables you to understand your own priorities. You will discover what expenses are essential in life. You’ll learn how to make a budget. You’ll decide for yourself to commit to your budget. You’ll decide what you have to do if you need to take emergency action if things have gone completely out of control.

Taking control of your finances means gaining control of your life. It’s a path to happiness and contentment. You’ll stop worrying about the future, because you will define your future, you’ll choose an easier life, you’ll know how to make your money work for you and how to ensure that your values in life stay protected too.

Choosing to work with a life or business coach about your financial management issues means choosing to focus on what matters to you, so that you can be free of stress.

FOOD FOR THOUGHT:

• If you found this checklist helpful, what other items do you think should be on it?
• If you’re worried about your finances why not share what’s bugging you below?
• Equally if you’ve had a great experience developing your own action plan with a life or business coach, why not share it and help inspire others to take the plunge?

 

 

SOURCE: https://www.lifecoachhub.com/coaching-articles/10-warning-signs-you-need-a-financial-management-coach

How independent financial advisers can build practices that thrive regardless of DOL fiduciary rule outcome

When it comes to the Department of Labor’s fiduciary rule, financial advisers continue to feel considerable uncertainty driven by the recent complexity of presidential directives and federal court decisions.

Beyond the general sentiment of DOL overload, the potential for prolonged further uncertainty about the rule’s future reinforces the importance for independent financial advisers to build practices that can thrive regardless of the regulatory outcome.

As a starting point, it’s reasonable to assume that the industry’s future will not belong to those advisers who operate on a product-centric and purely transactional basis.

Instead, our future will be defined by the need for advisers to focus on financial planning and personal finance coaching to deliver a truly advice-centric experience that helps retail investors meet their life goals.

(More: Prospects for independent adviser exams fade with increased SEC efficiency, Piwowar resistance)

With this in mind, independent financial advisers should look closely at doing the following:

1. Adopt digital investment systems that integrate seamlessly with your business. While it’s become increasingly clear that robo-advisers cannot replace the value of a real adviser’s experience and judgment, many of the underlying robo-adviser technologies that have recently emerged can add significant value to an adviser’s practice. Today, the goal among advisers should be to smoothly integrate digital investment technologies into every client relationship, so they can maximize their ability to focus on adding more strategic value to their client relationships, and to do so on a more scalable basis.

A good place to start is for the adviser to keep a careful log of his or her day-to-day activities over the course of one or two months, with particular attention to how much time these various activities require. From there, make a checklist of what tasks are time-consuming yet routine in nature, and not of strategic importance to your client relationships. These are the tasks that advisers should seek to automate by deploying technology systems, thereby liberating more bandwidth for client-facing and strategic activities.

2. Continue to deliver a diverse variety of investment management products across both the fee and brokerage channels. Much of the debate surrounding the DOL rule has focused on adviser compensation models and whether brokerage-based activities shortchange retail investors. Predictably enough, this has resulted in a shift of adviser business models towards a more fee-based approach. While this transition has made a great deal of sense in many ways, some advisers have taken things a bit too far by abandoning their dual registrant status entirely and becoming fee only.

With the retail investor landscape increasingly defined by smaller account sizes among millennials and a greater need for yield among baby boomer retirees, brokerage accounts that easily accommodate smaller investors and brokerage products geared at supporting income generation will remain important.

3. Affiliate with a firm that serves as a true facilitating partner for the delivery of financial planning and financial coaching capabilities. Building a practice that is immune, to the extent possible, from regulatory change isn’t something that most independent advisers can accomplish by themselves. It’s important for advisers to align with a firm that strikes the right balance between investing money in bells and whistles of questionable value to the adviser, and a no-frills approach that emphasizes maximum payouts and minimal investment in adviser support tools.

Instead, advisers should first ensure the leaders of the firm with which they are affiliated accept that the industry’s future will almost definitely look very dissimilar from its past. Among other things, it’s crucial that advisers make sure the firm with which they are affiliated is committed to supporting a financial planning and financial coaching approach to create an advice-centric experience for their clients.

(More: 4 ways to position your practice to attract more high-net-worth clients)

The most successful advisers of the future will be those who recognize that change in our industry is a constant — whether it’s driven by regulatory, demographic or technological shifts — and embrace the positive direction that such changes can represent when it comes to best serving retail investors as they pursue their life goals.

 

 

SOURCE: http://www.investmentnews.com/article/20170314/BLOG09/170319979/how-independent-financial-advisers-can-build-practices-that-thrive

Why You Should Hire A Business Coach (And How To Find A Good One)

If you don’t have a coach, you’re putting a serious cap on your own potential.

As a business coach myself, I’m obviously biased on this one. And I can’t know how well coaching will work for you specifically. But one thing is for sure: coaching works.

How do I know?

First, because I’ve seen the impact of coaching on my own life. I’ve invested more money in coaching than in any other area of my business. And it always comes back ten-fold (like when I hired my first coach, left my job, and doubled my income in the first month).

Second, because I’ve seen the impact of coaching on my clients. I’ve helped people find work they are passionate about, start businesses from scratch, and increase their income by working less. Here are some of their stories.

WHY BUSINESS COACHING IS SO POWERFUL

As entrepreneurs, we often forget to to step back and reflect. This leads to building a business that isn’t in alignment with the life we want, isn’t suited to our unique strengths, and isn’t meaningful to us.

I see so many people molding their life around their business, instead of the other way around. It’s a shame. They successfully break free from someone else’s prison only to build themselves a new one.

A good coach will make sure that this never happens.

And if you are a coach yourself, it is absolutely essential that you hire the best coach you can. Why? Because a coach who hasn’t been coached is a walking contradiction, asking people to believe in a process that they themselves have not invested heavily in. This is equally true of consultants, trainers, and other service professionals.

WHAT A BUSINESS COACH CAN HELP YOU WITH

Coaching as a profession is largely unregulated. This means you’ll find all different types of people calling themselves coaches, each with their own process. For example, one of my past programs was focused on 5 key areas, which I called my “B.R.A.V.E. Business Formula”:

• Business skills. Depending on your level of business experience, there may be certain foundational skills that you need to upgrade in order to be successful. The most common areas I help my clients in are marketing, sales, and productivity.
• Results. Success in business is ultimately determined by the results you get, not the time you spend. We’ll help you clarify your goals and then identify hidden places where you might be holding yourself back from achieving them.
• Action. Once we know the specific results you want to get, we need to break those big goals down together into smaller actions. That way, when you wake up each morning, you know exactly which high-leverage tasks to work on.
• Vision. We want to make sure that everything you’re doing is aligned with an overall vision for their business and life. We’ll create and expand that vision by pushing you outside of your comfort zone and reminding you got started in the first place.
• Energy. What might prevent you from accomplishing your long-term vision? We’ll want to optimize your habits, environment, and mindset so that you can focus only on the things that give you energy, not the ones that take it away.

These are basically the five things you need in order to be successful as an entrepreneur. If you are missing one of them, it is very hard to start or grow a successful business.

You may notice that business skills are only one part of the equation. These should be an added spice to the coaching, not the main dish. Which brings us to our first distinction:

MENTORING VS. CONSULTING VS. COACHING

Some people call themselves coaches, but in reality they are mentors or consultants. This is especially common online. So, what’s the difference between the three?

A mentor is someone who’s already done the thing that you want to do. They’ve gone before you on the journey and you want to follow in their footsteps. They’ll give you perspective and help you avoid the common pitfalls in a specific type of business. Some mentors are free, some are paid.

A consultant or advisor is someone who you hire to solve a specific problem in your business. They typically do some sort of diagnostic to find your areas of weakness and then implement part or all of the solution. You hire this type of person because you need answers that you can’t or don’t want to find yourself.

A coach is someone who empowers their client to develop themselves and find their own answers. In other words, a coach teaches you to fish instead of giving you the fish. Coaching is a unique skill-set in and of itself, which is why the best performers often don’t make the best coaches (and why the best coaches can be massively effective even if they don’t have experience doing exactly what the client wants to do).

Of course, there’s plenty of overlap here. The best coaches usually do a bit of each. But if all you want to do is learn a specific skill, or be told what to do, you are better off getting the help of a mentor or consultant.

PERSONAL VS. BUSINESS VS. EXECUTIVE COACHING

There are three main brands of coaching. Here’s a rundown of all three:

Personal coaches (or life coaches, although I don’t love that term) work primarily on developing the person they are working with. This development is almost always tied to an external outcome specific to the client (health, relationships, career). When I started off in my business as a personal coach, I focused on helping people find work they were passionate about.

Business coaches help people start or grow their business. While most of their work still focuses on developing the business owner or entrepreneur as a person, the primary goal of the coaching is usually to achieve a positive and significant revenue increase for the business. Because this type of work generates a clear financial return on investment, business coaches tend to charge more than personal ones.

Executive coaches work specifically with executives of large and medium sized corporations, or those on their way. The main focuses of this type of coaching are leadership, communication, and conflict management. This type of coach typically charges more money than the other two (though some business coaches may charge more) because they are working with larger businesses with more available resources and more growth potential.

There is often overlap here as well. Most entrepreneurs have a tight integration between their business, leadership, and life. Powerful coaches are able to dip into all three buckets when needed.

PRIVATE COACHING VS. GROUP COACHING

Coaches typically work with clients in one of two ways:

Private coaching agreements are typically co-created by the coach and client in order to meet customized goals in a specific amount of time. Sometimes there is a set program but this is rare for 1:1. Private coaching is usually more expensive than group coaching. It usually allows the client to move faster and go deeper because the coach’s focus is entirely on them.

Group coaching agreements involve more than one client at a time. Group programs are most effective when they are designed for a specific type of client wanting a specific result – that way the 1:1 coaching that takes place is relevant to everyone. The main benefit to group coaching, besides the reduced cost, is the sense of community that comes from being around likeminded people.

Each of these models can be done in person, on Skype, or over the phone.

HOW TO FIND A GREAT BUSINESS COACH

If you’ve made it this far, you’re probably interested in working with a coach. Unfortunately, there a lot of bad coaches out there. The barrier to entry is so low.

Here are 3 ways to make sure you get one of the good ones:

1. Referrals and Testimonials. Referrals and testimonials are king in the coaching world. Is this person used to coaching others with your background and goals? Have they gotten results for their clients similar to the ones you want to achieve?
2. Thought Leadership. Most good coaches are also writers and/or speakers. Check out their body of work. It will tell you a lot about their style, personality, and philosophy. A great place to start is with the thought leaders you already follow. Please note: just because someone is great at teaching, executing, or creating new ideas does not mean they’re also a great coach.
3. Strategy Sessions. I feel strongly that you shouldn’t pay for a coach until you’ve experienced their coaching in some form. Why? Because there’s something even more important than referrals, testimonials, and thought leadership: FIT. Coaching is, at it’s core, a partnership. I wouldn’t hire a coach before having a conversation in the same way I wouldn’t marry someone before going on a date. As the coach, I need to make sure that I am inspired enough by this person to hop on the phone with them multiple times a month.

Notice that certifications are not on the list. These days, you can literally get certified as a coach in a matter of days. I haven’t noticed a very strong correlation between number of certifications and quality of coaching. Certifications do not guarantee a high level of training or experience, and that’s what really matters

WHAT TO EXPECT WHEN HIRING A COACH

The pricing, length, and frequency of a coaching engagement varies widely. A good coaching agreement will be based on the needs of each individual client. But here’s a general idea of what you’re in for:

Length: Experienced coaches usually charge for 6–12 month packages, or on a retainer basis, instead of by the hour. Some programs are shorter and can last between 8 weeks and 3 months.

Pricing: Depending on the type of engagement, business coaching can cost between $500/month-$5,000/month or more ($1000/month is probably the average).

Frequency: 2–3 times/month is typical. But again, it all depends on the client. And the coach (I am in touch with some of my clients almost every day). The time you spend is less important than the insights and results you generate.

 

SOURCE: http://www.gregfaxon.com/blog/how-to-find-a-business-coach