Broker Check


By Michael Phillips Black, CFP, CDFA 

1. Not setting defined financial goals: Define your financial goals clearly. Set specific goals of what you want and when you want to achieve them. Envision what you want out of life, financially. A clear view of your goals is imperative and will cause you to do what is necessary to accomplish them.

2. Not having realistic expectations: Unrealistic expectations in respect to investment returns are often the source of discontent, either because the advisor "puffed" the potential returns, or because the consumer did not take into perspective the potential downside of losses associated with potentially higher return asset classes.

3. Allowing advisors to service their financial needs before yours: If your financial advisor has biases to their own company’s proprietary products, you may not be getting what you need, rather your advisor is fulfilling his/her production goals. Is your advisor working for you or his/her firm?

4. Acquiring financial products without understanding how they interact and affect your overall financial plan: Financial sales people promote the attributes and benefits of their financial products, but do not necessarily know your overall objectives. It is up to you to hire an advisor that will help you understand the impact of these products on your overall portfolio and determine the appropriate financial products. How many people have a drawer full of insurance policies, 401k/IRA/brokerage/bank account statements that they haven’t reviewed in several years?

5. Allowing emotions to dictate financial decisions: It is not time to invest when the evening news broadcasts the new high set in the markets. It feels right, but by definition, the market is expensive. The reverse is also true, when the market is down…it’s not necessarily the time to sell. Buying and selling based on fear and greed is usually a formula for failure.

6. I can do it myself: Most people need professional advice to manage their finances, whether it’s tax, legal, investment or other. Too often, people try to do everything themselves. Don’t be foolish – know your limitations and get help. The cost of mistakes made by "do-it-yourselfers" usually exceeds the cost of professional guidance.