Dan is a hedge fund trader in Chicago making a tremendous living for himself. He is 45 years old and has been saving for retirement ever since he started his career at 22 years old.
Dan has been working with a financial advisor from a well-known investment firm for many years. Over the years, his advisor has shown him projections indicating he is on track to accomplish his goal of retiring at 60 years old. He has run analyses and reports every year and given him confidence that he’s doing the right things.
A Second Opinion
After Dan learned the importance of getting a second opinion, he decided to pursue one. A colleague introduced him to a new financial advisor. When he met the new advisor from another well-known holistic financial planner firm, one which does not just do investments but also insurance and comprehensive planning, he found out that most financial advisors do not have a fiduciary standard. When he brought his statements to the new advisor for the second opinion, the new advisor pointed out that his investments were not under the fiduciary platform. This made Dan start to question the recommendations that his current advisor was making.
He came to find his advisor was making heavy commission every time he made recommendations.
A Closer Look
Dan went ahead and had a second opinion analysis put together. He found out that not only was he not on track to retire at the age of 60, he would need to save an additional $5000 a month to get on track. The second opinion financial advisor shared with him that his current advisor was projecting and predicting 10% rate of returns with his current plan, which is completely unrealistic based on his investor profile and risk tolerance.
Dan decided after a few meetings with the new advisor to switch advisors. He preferred to work with a professional that does comprehensive financial planning as opposed to just investment sales. On top of that, he grew to understand the importance of advisors working under the fiduciary standard.
A Brighter Future
Fast-forward three years and Dan is sleeping better at night knowing that his financial advisor with the fiduciary standard is legally bound to his clients’ best interest. Since his new advisor does holistic planning, he recommended that Dan own long-term disability insurance to protect his income and guarantee a future healthy retirement even if he were to become sick or injured and was not able to work. Dan is now well aware of how important it is to have a sound of a risk management plan as an offensive plan, and is thankful for the second opinion. He sleeps better at night, knowing that he has full financial security and an advisor that will always have his best interests in mind.
The Objective Measure Conference is coming to Minneapolis on October 5th. Objective Measure is about active financial leadership. It’s for both advisors and clients, and it’s about preparing for the future. Advisors have a responsibility to make the financial services industry all that it can be. Clients…and potential clients…have a responsibility to be proactive, to change the way they talk about and manage their finances. They need to take ownership of their futures alongside their advisors.