Premier Tax CFO

3 Misperceptions that Threaten Your Investing Future

Hour-by-hour, we are bombarded with a whirlwind of conflicting investment information.  We read it on the internet, we hear it in the broadcast media, and we talk about it with advisors, friends, and family.  Somewhere in this mix of choices, information, and opinions, every investor is looking for an advocate:  Someone they can trust.  Someone that will understand their current situation, educate them on their various options, and see them through to accomplishing their lifetime plans.  Let’s take a moment to visit some of the most common misperceptions surrounding the investments arena.

Media Hype
For many individual investors, the print and broadcast media is their main source of investment information.  The nightly news features any number of current financial ‘experts’ to tell you what you should and should not do with your investments.  All sense and sensibility scatter when your chief financial advisor is the current financial media sweetheart.  Remember, the media is not in business to educate you; it’s there to make money on advertising.  Whether it’s a business reporter or financial editor, popular author or radio host, the information presented is sensationalized to keep you engaged through the advertising spots they’ve sold to their sponsors.  Even if there is some truth in their story, it may not be the right information for you.  Extenuating circumstances related to your unique situation can make their financial advice the WRONG advice for you.  I talk with clients throughout the year regarding media stories that focus on the sensational and miss the important, causing them to worry, struggle, or panic about their investment picture. 

3 Things EVERY Investor Needs to Know about Their Wealth Manager

You need to be careful selecting a wealth manager by title alone because everyone with a securities or insurance license is hanging out a Wealth Manager shingle today.  Why?  Because they want to capture the sales opportunities that are part of investors’ new demands for holistic, integrated financial advice. 

To the financial and insurance industries, ‘holistic’ means more transactions from one investor:  more trades, more advisory fees, and more insurance or investment commissions.  More transactions from one investor means less work for them in securing another client or sale.  They try to hide their excitement behind collecting your information and producing fancy reports designed to convince you to ‘invest’ in their recommendations.  However, none of this changes the fact that their core business is to make a profit on investing your hard-earned financial assets in their products and services.  Are they Wealth Managers?  No.  They have just repackaged how they present their offerings to you.

While “Wealth Manager” may seem to be the best generic description for providing holistic, integrated financial advice, most of the 'wealth managers' using that title today can be divided into three broad categories.  You need to recognize them for what they are:  financial salesmen.