Today, more and more people are partnering with financial advisors to simplify their lives and reach their financial goals with added peace of mind. After a thorough screening, interview and evaluation process in selecting a financial advisor who is best matched for your individual needs, how can you further ensure a successful long term experience? Investment advisors have responsibilities to best serve you, but you also play a key role in the relationship. The following four tips are designed to help you play that key role and get the most from your investment advisor so they can better serve your needs.

Tip #1 Work with Your Investment Advisor to Set Realistic Return Expectations

It is critical when setting long term financial goals to use realistic rate of return expectations.  Your investment advisor can help you design a plan that can meet your goals while taking acceptable levels of risk. There is no return without some degree of risk.  Good financial planning requires practical input. Reasonable return expectations are a moving target depending upon where the financial markets valuations are at any point in time. Today’s valuation levels will be one important factor in determining prudent return assumptions in your future. Consider that sound return expectations provide another layer of protection and should give you more confidence in reaching your long-term goals.  In other words, it is far wiser to set reasonable expectations and outperform the forecast than the other way around.

Tip #2:  Monitor Your Investment Advisor and Measure Results

After thorough due diligence you have found an investment advisor you are comfortable is compatible with your needs.  In essence, you have hired an experienced captain of your financial ship and it is time to let your advisor do their best work. It is fine for you to relax on the cruise ship deck but you should do two things. Simply monitor the advisor to make sure they are following your agreed upon guidelines and then measure results over time. Is the investment advisor managing your investment portfolio consistent with your needs?

Results should be measured on a periodic basis to make sure you are on track. Refrain from second-guessing each individual investment holding or interfering in the day to day decision making process. Rather it is best to review the account performance as a whole. It is rare and unrealistic to expect all investments to perform well simultaneously. Performance should be measured in relation to the amount of risk taken and best reviewed over a complete market cycle (often several years) through both good and bad periods. Over time, your financial advisor can best earn your confidence by staying on course with the investment process and meeting your long term needs.

Tip #3: Remain Focused on Long-Term Investment Performance

When you invest money into the financial markets you are not only committing your hard earned capital but also your emotions. Short-term market volatility increases emotion and focusing on every twist and turn will exacerbate those feelings. It’s far better to gain perspective by concentrating on the bigger picture. Whoever penned the phrase, “Patience is a virtue”, must have been writing about investing. Your chances of being rewarded with long-term investment success increase dramatically by simply remaining patient. Even the best investment advisors will underperform from time to time. Consider a hall of fame caliber hitter in baseball going into a slump for long stretches, but finding a way to re-discover his swing. The same is true for a great investment advisor.

Tip #4: Stay Connected With Your Investment Advisor

When you partner with an investment advisor a best practice is to stay well connected and communicate any concerns either by phone, email or with occasional face-to-face meetings. Think of your relationship with your financial advisor in a similar way to that with your doctor. Typically you meet with your physician for one of two reasons: A) something is wrong or B) you have an annual checkup. Both are very important, but there is a big difference- one is reactive, while the other is proactive. Being proactive and staying connected with your investment advisor will help you rest easy at night and will allow you to focus on more important matters. Ongoing communication and annual one-on-one financial checkups will help your advisor better understand your needs and help you reach your long-term goals.

The Key Takeaways

Your partnership with your investment advisor is truly a team effort, requiring trust, confidence, communication, patience and realistic expectations. Following these four tips will help you get the most out of your relationship, thereby enabling you to reach your financial destination with peace of mind.

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Disclaimer: Pring Turner is an investment advisor registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940. The views represented herein are Pring Turner’s own and all information is obtained from sources believed to be accurate and reliable. This information should not be considered a solicitation or offer to provide any service in any jurisdiction where it would be unlawful to do so. Past performance does not guarantee future results.

Disclaimer: Pring Turner is a Financial Advisor headquartered in Walnut Creek CA, and is registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940. The views represented herein are Pring Turner’s own and all information is obtained from sources believed to be accurate and reliable. This information should not be considered a solicitation or offer to provide any service in any jurisdiction where it would be unlawful to do so. All indices are unmanaged and are not available for direct investment. Past performance does not guarantee future results.

Jim Kopas, CFA
Jim Kopas, CFA
Jim Kopas, CFA Jim's “professional” career began at the ripe old age of 11 when he started a dog walking service in Walnut Creek to help neighbors with especially energetic pets. After just a few months of walking dogs and with years of accumulated birthday savings, Jim had enough money to open his first investment account. He has been enamored with investing ever since. Jim holds a BSC degree in Finance, from Santa Clara University. In 2013, he earned the Chartered Financial Analyst®(CFA) designation, one of the most respected and recognized investment advisory designations in the world. Jim is Financial Planner and Investment Advisor at Pring Turner, Walnut Creek, CA.

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