More often than not, people find a financial advisor and work with them all their lives. This approach puts most investors in their comfort zone with respect to their financial planning. Due to this, they may underestimate the need for getting a second opinion on their decisions.
If you can relate to this, your contentment can be detrimental to your financial health. In fact, you may have already incurred several financial losses.
Did you know that if your financial advisor is not a fiduciary or a registered investment advisor with the SEC (Securities and Exchange Commission), they may not be required to put your interests before their own?
Getting a second opinion gives you a chance to identify and rectify problems with your current financial plan or investment strategy. It offers a neutral perspective to verify if your current advisor is employing the most effective methods to meet your desired financial goals.
Those who invest on their own can especially benefit from getting a second opinion. The extensive analysis ascertains whether or not a sound plan is in place, bringing you peace of mind. Investors can rest easy knowing that they are on the right track towards realizing their financial objectives.
In short, getting a second opinion on your financial plan can prove to be a boon.
How to Get a Second Opinion?
Here’s how to seek a second opinion on your finances and investments.
- Identify a reputed wealth management firm where you can work with seasoned financial advisors like Financial Advisor Ann Arbor
- Visit the firm’s website and take a look at the team members’ credentials. Check if the advisors are a fiduciary or Registered Investment Advisor with the SEC.
- Contact the firm and schedule an appointment. Inform them that you are seeking a second opinion on your finances.
- Meet with the advisor and discuss your current financial plan, investment plan, and future goals thoroughly.
- Post the meeting, revisit the opinion of the financial advisor, and see if it sheds new light on meeting your financial goals. Consider if your current advisor has covered all those points in their plan for you.
It is best to work with a locally placed firm as it will be close in proximity and you will be able to have in-person communication with the advisor. Further, a local advisor/fiduciary will be conversant with financial schemes that will maximize your wealth by taking advantage of plans applicable to your state or city. For instance, residents of Orlando will do well to approach experienced Florida financial advisors for the best results.
Benefits of Getting a Second Opinion
1. Re-evaluate Your Goals
Getting a second opinion on your finances gives you the opportunity to re-evaluate your long and short-term goals. With changing economic conditions, this can be immensely helpful, especially if you haven’t done this for a while.
You may want to reexamine your retirement goals, for example. A second opinion will help you verify how much money you will need by the time you reach this milestone. Similarly, you can reassess your other important financial goals, such as creating funds for children’s college education or for aging parents. You can also foresee the issues that may arise in the next five or 10 years, and figure out a plan of action accordingly.
2. Gain Confidence and Peace of Mind
Even if you are already working with a trusted financial advisor, it doesn’t hurt to get a second opinion on your plan to find out if there are any untapped opportunities. This way, you will be able to restructure your savings and investments as efficiently and optimally as possible.
The bottom line is that it is always better to be equipped with more information and a better understanding of your goals and potential outcomes. This will give you the confidence and peace of mind that your financial plan is on point.
3. Understand Market Volatility and Risks
Market conditions keep changing and this volatility can have a lasting impact on your investments, especially if you are nearing retirement. Getting a second opinion will enable you to gain a clear understanding of your savings and wealth allocation, and determine whether or not they are in keeping with your goals and objectives.
4. Gain Fresh Perspective
It is important to keep gaining fresh perspectives on your current financial situation and the positioning of your portfolio. Depending on your goals and expectations, a fresh pair of eyes will give you new insights and reveal if your investment returns will help you realize your financial goals.
Once you have a second opinion from a fiduciary advisor, you can continue with your current strategy if your portfolio is on the right track. If, however, you find that you’re missing out on lucrative opportunities for no good reason, you will be able to take concrete steps to change that.
5. Expertise for DIY Investors
While you may be taking all the right steps when managing your wealth yourself, you may not have the expertise to navigate factors such as risk mitigation, creating steady income streams, and preserving wealth for future generations.
Many DIY investors stick to conservative investment options like bonds, cash, and index funds. However, it is important to realize that as you enter different stages of life, your investment goals change too.
Whether you go for conservative or high-risk-high-return investments, it is necessary to ensure your wealth and investments are protected against a sudden market crash or other unfortunate events. Getting a second opinion on your finances will help you evaluate whether or not you have achieved this balance. If you haven’t, you will know about the steps to take to do so.
Conclusion
While the term “second opinion” is usually associated with your physical health, it applies to your financial health as well. It is always a good idea to spare some time to cross-examine the health of your existing financial plan. Ideally, your plan should strengthen over time and deliver on its promises. Complacency in this matter can cost investors big in that you may miss out on bigger and better opportunities to invest optimally and grow your wealth.