HAVE YOU BEEN STEREOTYPED BY YOUR FINANCIAL ADVISOR?

Have you ever heard the following?

• You should be fine withdrawing 4% annually from your investments in retirement.
• It doesn’t make sense to pay off your mortgage when the interest is tax-deductible and you can get a better return by investing your money.
• Take social security as soon as you can so you don’t have to withdraw from the money you have worked so hard to save. Besides, you never know what is going to happen with social security.
• It is better to take a lump sum from your pension plan than to take monthly payments.
• When you’re young you should invest aggressively and become more conservative as you get older.

If so, you have likely been stereotyped.  When an advisor stereotypes an investor, they’re not seeing the investor as an individual with a unique appetite for risk, a unique set of financial circumstances, and a unique set of goals.  Sure, there are some things common to all investors - such as taxes, inflation, living expenses, and health care.  But using only common assumptions and taking common advice without a detailed financial plan that is specific to YOU exposes you and your family to financial failure.

Let’s take, for example, the last statement.  In actuality, everyone has an individual tolerance regarding risk and reward that is not necessarily dictated by age.  When a person is invested incorrectly, they panic during market swings, buying high and selling low, which can negatively affect their long term goals.  This will happen again and again until the investor corrects their investment strategy – or fires their investment advisor.

I want to empower you to recognize and react to stereotypical advice.  My future blogs will cover these and more.  In the meantime, if you’re looking for advice that is specific to YOU – let’s talk.