We all save for something.
It may start off small to save for a car, then a house and eventually we need to save for retirement. The best way to save for retirement is through an employer’s 401(k) plan. Other avenues are IRA’S (individual retirement accounts) or regular savings that build up over time. The growth of your wealth is important to hold onto and at some time you may need to seek out a professional investment advisor to assist you in achieving your goals. Saving for retirement is difficult and so is finding the right investment advisor.
Seek out an advisor who stands behind the term “Fiduciary”.
Fiduciary means trust and honesty. Your investment advisor should act as a fiduciary when managing your investments as he or she acts solely for your benefit. To take this a step further, your investments selected for your portfolio should benefit your overall objectives and not be purchased or sold for the benefit of the advisor. Not every advisor has to meet Fiduciary standards but Charter Trust does meet those standards and does act as a Fiduciary.
Why not every advisor?
Broker-dealers are held to a lower standard known as Suitability.
In today’s electronic environment, there are many ways for individuals to invest on their own. You may see advertisements for low fee investment platforms or are you paying too much to your investment advisors. I say “beware”. The fee is one part of the equation and most commonly when invested in mutual fund families, most do not think they pay a fee because they do not see the fee. However, we all know that nobody works for free. Fiduciaries do not have proprietary assets to trade. The industry, like all industries, has its competitors and you may already have the best investment advisor because if they put your interest firsts, then you are ahead of those who tend not to pay for the right advice.
Having a relationship with your advisor is important as they should understand you – including your goals and time horizon. Your investments are yours and should not fall into a model or basket of like allocations. Risk management is a big factor that needs to be considered and there are different tiers of risk. Market risk, stock price risk and income risk are to name a few. The biggest risk one needs to consider is the potential of losing money or falling short of your goals.
Strategic decisions based on current economic conditions (what stocks and or sectors should be favored), tax management (what type of bonds fit your tax bracket) and estate planning (do you have an attorney, or are your trust documents up to date), IRA beneficiaries (who inherits your money) should all be discussed in order to provide you with the best service.
Ask the advisor/company about their investment process and how recommendations are made for your portfolio along with who processes those recommendations. These questions will assist you in discovering what the relationship might be if you were to work them and if you fit into a model/basket or are an individual.
It is all about the communication!
Good luck and know what you are invested in.