Last Two Clues: Changes Could Warrant a Second Opinion Part III

by David D. Holland





We’ll wrap up this series with a couple adviser changes that should give you pause for thought. I’m not picking on advisers; it is just that certain changes could cause problems that you would be well-served to avoid.


About Face: Let’s say your adviser has recommended “XYZ Company” for years. You’ve heard all about how wonderful XYZ Company is and how good it is for you. Then, out-of-the-blue, your adviser recommends another company without explanation (let’s call it “ABC Company”). It would be wise to ask the adviser a few questions:


1. Why are you no longer recommending XYZ Company?
2. Why are you recommending ABC Company? Did you look at other companies? How many? Describe your selection process.
3. Will I have to pay a fee to sell XYZ Company or a fee to buy ABC Company?
4. Will you receive compensation from either transaction? How much?


There can be many good reasons for advisers to change the companies or products they recommend. Frankly, that’s part of what we’re paid to do. For example, if the Morningstar™ rating drops on one of the no-load mutual funds currently held in my clients’ portfolios, we’d possibly sell it and buy a different one. There would be no commission to my firm because we are paid a fee for managing the investments. (In other words, there’s no incentive for us to make a change unless we believe it is best for our clients.) The key point here is that you need a clear understanding on why a change is being made. Get that information from your adviser – or you may have to get it from someone else.


Facing Retirement: Advisers get to retire, too! And, that’s a good thing, but you’ll want to re-evaluate your situation when that time draws near. If your adviser is starting to show signs of “wear and tear,” there’s nothing wrong with asking about his/her plans. It is not that you are nosey; you need to look out for yourself. Who will take over for the adviser? Retirement for an adviser can also be a convenient time for you to double-check how your retirement funds are being managed. Ask another adviser for a confidential review.


The “clues” we’ve discussed over the past three weeks aren’t the only signs you may need a second opinion. If you have lingering questions, or you’re uncomfortable with your current situation, there are many quality advisers who don’t charge (or don’t charge a lot) for a financial review. Remember, change can be good. When it happens, make sure you know why, and always try to get a “heads up” if it’s going to significantly impact your personal finances.





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David D. Holland, a CERTIFIED FINANCIAL PLANNER™ practitioner, hosts a weekday radio show at 9AM on AM1380 Ormond Beach, AM1230 New Smyrna Beach and AM1490 Deland. He has also authored two books in his Confessions of a Financial Planner series. Holland offers investment advice through Holland Advisory Services, Inc., a registered investment adviser in Ormond Beach. He can be contacted at (386) 671-7526. Email your financial questions to