Quick summary - It is essential to understand the dynamics of what is going on in a second opinion consultation with a financial adviser. Knowing these four dynamics will help ensure you are making good use of your time and making the right decisions!
There is one thing you can count on when getting a second opinion on your retirement investments- disagreement. Every financial adviser has his or her ways of going about the investment process. Chances are it is going to be different than how you are currently investing. It could be the smallest difference. Yet it will be enough to create a doubt in your mind. Getting a second opinion can be a good thing as long as you realize a few things up-front. Not knowing these four things could lead to some bad decision making on your part.
It is all about opinions and pros and cons
Advisers can be so opinionated that they speak as if their opinions are fact. Don't lose sight of one truth. Only time will tell who was right and who was wrong. The proper way of going about giving second opinions is talking in terms of pros and cons. An appropriate method of providing a second opinion is to weigh the strengths and weaknesses of a person's investments and see if they fit with one's values and risk level. That should be the adviser's priority.
It is all about the retirement goals
A second opinion is useful when the adviser connects what you are doing with your own retirement goals and not just the investment strategy. The past is the past, and it could be positive or negative. The second opinion should realistically assess your current investment strategy's pros and cons and its ability to achieve your retirement goals based on the present. Investment planning and goals are equally important to how you are investing.
It is all about the second opinion and not the adviser
If you go to an adviser for a second opinion, you are doing so because of the second opinion assessment and not an investment presentation. If your second opinion consultation starts out with 5 minutes of questions and turns into a sales presentation, you are probably talking to the wrong adviser. This is about a second opinion and not a prospect meeting.
It is all about the level of experience
Are you seeking a second opinion from an adviser who has the experience level to give you a second opinion? If the adviser doesn't have a good grasp, you are probably going to waste your time.
If you are concerned about your current adviser relationship, a second opinion could be a good idea. Just make sure you contact the right adviser who will put your interests first.
Bob Brooks is the daily host of the Prudent Money Radio Show. He writes about stewardship and financial topics Monday through Thursday each week. For questions or advice, feel free to contact Bob at 972-386-0384 or firstname.lastname@example.org.