Clients Area

How Far Should Your Planner Go to Save You From Yourself?

Suppose one of my clients has his heart set on using half of his retirement account to buy each of his grandchildren a new car. Or a client in a panic over falling markets wants to sell all her stocks and buy gold. What is my responsibility as their financial planner? How far should planners go to try to keep clients from making serious financial mistakes?

It’s important for planners to respect clients’ competence and ability to make their own life decisions. Client-centered planners also need to remember that the goal is to help clients get what they want, not what the planner might want or think the client should want. On the other hand, should a planner stand idly by and watch someone walk off what the planner perceives as the edge of a financial cliff?

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Important Questions Investors Fail to Ask

Last week I reported on the three top questions investors wanted answered when advisors recommended investments. The rankings came from a survey of investors, funded by Dimensional Fund Advisors, conducted in March 2014 by Advisor Impact. I suggested the top two of those factors, the risk associated with the investment and the expected future performance, probably didn’t belong at the top of the list. The third one, fees and costs, is certainly important, but under half of the respondents thought so.

This week we will focus on the three least important things investors wanted to know. All three deserved to be much higher on the list. In my experience, they are what most investors really need to know.

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piggy with graduation cap on money

Rick Cited in USA Today Article on 529 Plans

To open a 529 college savings plan for a child or grandchild, you don’t have to stick with your own state’s plan. You can choose one from another state if it has lower fees or is a better fit for your family.

The important word in that last sentence is “if.” In a November 3 article by Kate Stalter at USA Today, Rick recommends comparing expenses and investment offerings before you choose a 529 plan. He says, “Everything that applies to investigating any investment applies here.”

The article is titled ” Should You Seek Out ‘Destination’ 529 Plans?”

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question mark with dollars

What Investors Want to Know But Don’t Know How to Ask

When an advisor recommends a particular investment, how do you know it’s right for you? Financial writers, myself included, say you need to ask questions. The trouble is, according to a recent survey, most investors ask the wrong questions.

The March 2014 survey polled 1,229 investors. They were asked, “When your advisor makes an investment recommendation for your portfolio, which, if any, of the following are important for you to know?”

For 70% of the respondents, the most important information was the risk associated with the investment. At face value, this seems to be quite logical.

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Sarah Cited in Article on Dementia and Financial Planning

An October 20 article at New Retirement, titled “How to Deal with Dementia or Alzheimer’s: 5 Retirement Financial Planning Steps,” focuses on preparing for and coping with the financial challenges of dementia. One of the keys to preparing for this possibility in retirement is “to have everything organized and known sooner rather than later.” That advice comes from KFG’s Sarah Swantner, who is quoted extensively in the article.

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