- Glenn D. Surowiec
Five Signs You Need a Financial Advisor
It's usually obvious when we need a gym membership, diet plan, or personal trainer: the bathroom scale or the button on a suit jacket provides an instant indicator that we're struggling on our own. Faced with weight gain, we call in the experts to help us reverse a trend we don't like. But it can be much harder to know when we need professional financial help. As a financial advisor and investor, I'm actually most necessary when things are going well – when there is money or savings to be preserved or grown. But even then, most people in financial comfort are risk-averse, and not interested in fixing something that isn't broken. But for just a moment, allow me to be the button on the suit jacket of your wealth – the indicator of need that's been missing from your financial picture. Here are my top signs that you're in need of a financial personal trainer – aka, an investor. 1. You changed jobs. This is one of the most important moments for financial guidance. Your old 401k dollars are being held in a system designed and optimized for your employer, not for you, and that's where a financial advisor can be the difference between simple account management, and true wealth creation. 2. You still have money in a previous employer's 401k plan. The same is true of jobs you left long ago. Many individuals simply don’t know they can roll over their money into a personally managed IRA. Remember, 401k administrators aren’t encouraged to disclose this to exiting employees. 3. You own mutual funds. Many individuals have a portfolio of mutual funds without any real knowledge about what the fund actually does and owns. They know it by name only. They know little about its performance, fees, how many positions are inside, or any other aspects of its management. They have never had someone “look under the hood.” But because you are already investing, you are likely ready for strategic investment solutions – you're just trapped inside mutual funds because so far, this is what you have been exposed to. An advisor's job is to expose you to a better, more transparent way of investing. 4. You're a self-directed investor. “Do-it-yourselfers” (DIYers) are the hardest to convince that they may benefit from financial guidance. There’s an illusion that more control will always equal better results, and that having someone else in the driver’s seat can't possibly be better. But results don’t lie. "DIY" investors should keep score, and should track performance, to test their efficacy. Most DIY investors are massively underperforming because they haven’t mastered the emotional side of the equation, and are totally disconnected from their personal strengths and weaknesses. They also aren't tracking their performance on an absolute and relative basis over time. There are opportunities, and data points, being missed because the full-time focus of a DIYer is likely not investing. But me? I eat, sleep and breathe this stuff, and that knowledge should be put to work for you. 5. You're not in the game. Perhaps the most obvious reason of all is that you've never done any investing, and find yourself with funds to manage. There are many investing philosophies to which you can subscribe, and here's a pro tip: none of them should be selected using a 15-second TV commercial. Value investing (at work here at GDS) requires patience, and patience comes from information, which we gather and synthesize for you in spades. We base our plans on detailed research into company health and other factors to back up our positions and calculate our risks. So if you like actionable data points, and can be patient, a value investor like GDS is perfect for you. Whatever your style, an investor can help the first-time investor avoid costly mistakes. It's a fast, high-stakes world, and we're ready to show you around.