You probably spent a good deal of time and effort deciding to hire your current financial advisor. However many investors fail to monitor their financial advisors past that initial research. The start of a new year is a perfect time to do this, and it’s one of the areas in which we focus during our initial conversations with you.
We do this through our complimentary Envision process. The end result of this process is a financial road map that 1) allows you to see and examine your entire financial picture in one place, 2) allows you to monitor most if not all of your holdings down to the ticker symbol or cusip, 3) breaks down the fees (maximum sales charge and annual expense ratio) of each fund to show what you’re actually paying, and 4) shows the level of diversification and the total risk/reward you are currently taking. Start your Envision process by answering a few questions here.
Here are a few items you should be sure to know about your current financial advisor and portfolios.
Total Fees
Whether you are paying an annual percentage of your assets or a fixed fee, there are usually other fees that add to your total cost.
- Mutual fund fees on top of your advisor’s fee (can range from 0.5% - 2.5%!)
- Other fees that add up over time (trading costs, etc)
Total Portfolio Risk
Having several accounts and portfolios can make it hard to know how much risk you are taking on a whole. If you’re taking too much risk, you could lose more money than you can handle. If you’re taking too little risk, you may not have enough to live off of during retirement.
- Your total risk/reward of all your portfolios combined
Diversification
This goes hand in hand with your total risk level. Generally, the more diversified you are the less risk you’re probably taking.
- Diversification across all of your portfolios (asset class, country, sector)
- Diversification for each portfolio (asset class, country, sector)
Warning Signs
It’s prudent to evaluate your financial advisor on non-financial matters.
- You speak with your advisor less than once a quarter
- You are always the one calling your advisor, not the other way around
- Your portfolio is only made up of products the firm manufactures (proprietary products)
- Your advisor always has the latest and “greatest” products
WrapManager’s Envision Process
We like to consider ourselves not only an authority on money managers, but also the main advisor for our clients. Our complimentary Envision process allows you to see your accounts, advisors, risk level, diversification, fees and more in one big picture. This enables us to plan for things like your goals, future income, inflation, social security, selling your business and other life events.
You can start your Envision process by answering a few short questions here. You can also contact one of our Wealth Strategists at (800) 541-7774 or to get started now.
EnvisionSM is a licensed product of Wells Fargo & Company
This documentation is being sent for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy any security in any states where such an offer or solicitation would be prohibited by regulations. Accordingly, no client or prospective client should assume portfolios presented (or any component thereof) serve as the receipt of, or a substitute for, personalized advice from WrapManager, Inc. or from any other investment professional. Past performance may not be indicative of future results. Therefore, you should not assume that future performance of any specific investment or investment strategy made reference to directly or indirectly by WrapManager in its literature or otherwise will be profitable or equal the corresponding indicated performance level(s). Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be suitable for your investment portfolio. While we believe that diversification in an important aspect of a proper investment plan, diversification does not guarantee a profit or protection against loss in a declining market.
WrapManager, Inc. is an investment advisor registered with the SEC. The associated persons of WrapManager, Inc. may also be securities agents with Prospera Financial Services, Inc., a registered broker/dealer, member FINRA/SIPC. Opinions expressed are those of WrapManager, Inc. and are subject to change without notice and are not necessarily those of Prospera Financial Services, Inc., its directors, parent company or its affiliates. Securities offered through Prospera Financial Services and cleared through First Clearing, LLC which is an affiliate of Wells Fargo. Wells Fargo and WrapManager, Inc. are not related entities. Individual money managers presented in this report and WrapManager, Inc. are not related entities. However, WrapManager does recommend the use of the money managers presented to clients and shares client fees. The level of due diligence performed varies by money manager and product.