Why are people afraid of getting a second opinion when it comes to their personal finances?
Conducting your due diligence… comparison shopping… Call it what you will, when is the last time you’ve taken a good, hard look at whether you’re making the most of your personal wealth while also protecting it? It’s a good idea to seek a second opinion now and then on these, and other important considerations:
- Personal Financial Plan: Do you have a plan? A plan that if asked for, you can put your hands physically on it? A clear financial road map to put you and your family in the best possible position to achieve your Lifestyle Goals?
- Personal Suitability: As part of your plan, does your total portfolio as well as the funds within it do a good job of reflecting your personal goals, challenges, and tolerance for market risks?
- Accountability: Do you have a good grasp on what you hold, and why? Often, clients come to us having accumulated a medley of investments over the years, without knowing whether each investment plays a meaningful role in their greater portfolio.
- Accuracy: Have the funds selected been managed as advertised? For example, if a fund claims to provide exposure to global stock market returns, has it done so? Some actively managed funds have excessive leeway to deviate from their stated mission, which can expose you to more, less, or different kinds of market risk than you intended.
- Costs: Are comparable, or even better-managed investments available for less than you’ve been paying? Are you paying high annual fees and receiving no advice or value? Are your investments correctly structured for maximum tax efficiency? The correct balance of taxable and tax minimising investments.
- Performance: How has your portfolio performed – not just in general, but in the context of your overall financial plan? Are you still on track for your long-term goals? How does short term volatility effect your financial plan if at all? Remember no one has a crystal ball and can foretell what the markets will do in the future, so performance is an uncontrollable metric. However, you can control your investment strategy, exposure to risk, investment costs and tax efficiency.
If you have your doubts to begin with, it’s stressful not knowing where you stand on these and similar questions about your financial future. Even if you feel all is well, it can’t hurt to confirm that from time to time.
That said, there are wise and ill-advised ways to seek a second opinion on your current financial situation.
First, seek substance. As suggested above, a reliable second opinion should be deeply informative and highly pertinent to YOU – not just some template with your name and a few numbers filled in here and there. It should offer you objective insights into each of your investments, as well as whether your total portfolio is optimised for your particular needs and lifestyle goals.
Likewise, watch out for veiled sales pitches. Consider it a red flag if a second opinion source is spending scant time learning about you and your unique financial circumstances, and excessive energy mostly touting other providers and products for cheaper (that’s how they get paid).
A second opinion should bring you financial clarity. You should be left feeling you now understand your own big picture: what you own and why you own it. Whether it’s along your existing path or in a new direction, you should be better equipped to proceed with improved confidence in your investments and long-term financial plan.
Would you like to receive a second opinion from Metis Ireland? It would be our pleasure to help and provide you with your own Metis LifePlan. Please feel free to contact me at email@example.com.
It all starts with a cup of coffee (or tea) and a chat, at the end of which you will know what we will do for you and how we will add value to your family and future. You will also know our fee structure in providing you with our Metis LifePlan service.
PS: If you feel your friends or even a family member would benefit from this service please feel free to get in touch!
Private Client Manager
Metis Ireland Financial Planning Ltd t/a Metis Ireland is regulated by the Central Bank of Ireland.
All content provided in these blog posts is intended for information purposes only and should not be interpreted as financial advice. You should always engage the services of a fully qualified independent financial adviser before entering any financial contract. Metis Ireland Financial Planning Ltd t/a Metis Ireland will not be held responsible for any actions taken as a result of reading these blog posts