Is it time for you to change your financial adviser?
In the most simple terms if you didn’t receive the return on your investment that you expected last year, then yes, it may well be time to change adviser.
In more complex terms there are a number of areas to consider more closely when judging whether or not its time to change adviser.
This post will run you through some key areas you should assess so as to make an informed decision about whether to switch to a new service.
Was Your Invest Performance Lucky?
Over the last six years or so, most investors have been receiving a good overall return and this period of time has been what is known as a bull market. In laymen’s terms, this means your adviser may have simply got lucky; earning you money without skill or insight.
This all changed in 2015 however, when the stock market had its first negative return in six years. This means it’s wouldn’t have been unusual to have received a lower return last year, but was yours lower than it could have been? Given the performance of the market last year, after typical expenses it may have been normal to receive a negative 2 or 3% return, but anything from 5-10% and its time to start looking at what went wrong.
What kind of strategy did your adviser apply and did it work? For example, he or she may have gone for a low cost ‘match the market’ strategy, if so did this work? Alternatively they may have gone for a higher cost, ‘beat the market’ strategy, if so did this more costly approach see a good return for you?
Reports and Feedback
A good adviser will keep you constantly updated- and not just when times are good. If you don’t feel your financial adviser has built a sufficient relationship with you, or fails to provide thorough data and reports, even during slump times, then it’s almost definitely time to change adviser. If you didn’t feel you were given enough facts to make an informed decision, this could also be an alarm bell to change services.
Does your adviser work from your own feelings on risk? A good adviser will take your lead when it comes to risk and won’t coerce you into either taking a gamble you wouldn’t take or playing it safe when you’d rather gamble. If you feel you were talked into a risk strategy that wasn’t to your choosing, this is another alarm bell.
Quite simply, how much did your adviser charge? Was this expense greater than your overall return for 2015? If so then it’s almost certainly time to change adviser.
Is Your Financial Adviser Working in Your Interests?
Whilst these factors all look at the finer number crunching of investment, the most important thing is your instinct. How do you feel about your financial adviser? Does he or she understand where you are in your life and what you are looking for investment-wise? Do they have experience across the investment market including pensions, equity release and retirement as well as general investment? Do you feel he or she has invested in you as a person and will be there to inform you and answer questions in every sort of market, good or bad?
Another key area is to look at how many products you have been offered. Do you feel the products you’ve been offered in terms of pensions for example, has been limited? A good adviser will offer all products and not just the ones they make the best commission on.
What Should You Do If You Are Concerned About Your Finances?
If you feel your financial adviser hasn’t performed to the best of their ability, then it’s time to change. 2016 will be an interesting year for investment, especially for those looking to make the most of their retirement and ensure they have something to pass on, so make sure your adviser is up to the challenge.
If you are unsure about your current financial adviser, or haven’t previously had financial advice, then please contact Maxim Wealth Management today on 0141 764 0040 (Glasgow) or 0203 841 9941 (London). Our team will be happy to help you make sense of your finances.