Question: My wife and I have been working with a financial adviser for many years and have been quite satisfied with his advice and in general with the results. (It is hard to feel completely satisfied with the results when the economy hurts us as it does.)
Recently, my father passed away and left us a substantial inheritance. The person who managed his money (with whom my dad was quite satisfied) is obviously anxious to keep my money under his own management. However, both his personal style and his investment advice are quite different than what we are used to.
In the past, our money has been in a variety of traditional mutual funds. This new adviser is recommending owning “high quality stocks” and exchange traded mutual funds and I have no experience with either of these.
I am personally uninterested in knowing or understanding the ins and outs of investing, preferring rather to trust an adviser to handle things and give us fairly specific advice.
So now, how do I handle this new adviser?
I should add that this adviser claims his firm handles money for a variety of very wealthy sports figures and other celebrities. My gut tells me that his style doesn’t match mine, but my mind says “If the rich people are doing this, it aught to be good for me too.” (Reminds me of Madoff!) John, Saint Paul, MN
Answer: I’m assuming that your late father’s financial advisor is ethical and competent. (However, just because the rich invest a certain way doesn’t mean it’s right for you.) The investment advice isn’t inherently wrong, either.
But the key issue for you and your wife is that you need to work with someone you’re comfortable working with and discussing very personal money issues.
A good financial planner will spend a lot of time trying to understand you. You need to make sure that you’re at ease with the personality of the professional.
Obviously, the relationship worked for your father, but it isn’t satisfying for you and your wife. So, I would shift the money to the financial planner you have already established a strong relationship with or, if its time for a bigger change, start the process of looking elsewhere.
One last thing: You do need to educate yourself on what your planner or your next planner is doing with your money. One of the biggest mistake people make when it comes to financial planning is simply turning their money over to a professional and assume they’ll do all the hard work. It’s a recipe for financial trouble. When I lived in New York, the discount clothing store Syms always ended its television commercials with the line: “An educated consumer is our best customer.” That’s holds for financial planning, too.
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