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  • Bob Brooks

What Should you Expect from your Financial Advisor?

I remember the 90's as if it were yesterday. During the 90's, if you wanted a winning stock, all you had to do was open up the stock section of the Wall Street Journal, hang it on the wall, throw a dart at the stock page, and invest into the stock you hit with the dart. It was that easy. Being an advisor was real easy in the 90's. Everything was making money, lots of money. The world had never really seen a bear market since the last bear market ended before the normal everyday investor started investing in the early 80's. So, the notion of big losses was an imaginary tale for most investors. 

Now that we are two bear markets later, we know that markets can go down and go down badly. Leading up to 2018, you could have thrown that dart and achieved the same stock picking results. It has been easy, maybe a little too easy, to make money. Now, we are in 2018 and it is not so easy. We also learned that when money gets real easy to make, a couple of things happen. First, easy money environments end badly at some point with the beginning of bear markets. Second, Financial Advisors get apathetic. According to the latest American Customer Satisfaction Index, satisfaction with financial advisors fell from a score of 80 out of 100 in 2017 to 79 in 2018.

Financial Advisors really earn their money during the tough markets. If we are in the throes of the beginnings of a bear market, are you with the right advisor? It is a fair and important question. Bear markets can do a lot of damage to retirement investments. Here are some red flags to look for:

(1)  Advisor says, "You are a long-term investor.  Don't pay attention to the ups and downs of the market."

What they are really saying is - I don't really have an alternative strategy for a bear market.  So just stay invested and take the losses.  They will come back over time.

(2)  Advisor says, "There is no way that a bear market has started."

I can't say for sure if one has started.  However, a good advisor never rules it out and is always ready just in case.

(3)  Advisor says, "We should switch to an annuity to protect you from losses."  

Annuities can be great investments for the right person. However, they need to be recommended based on a person's risk level and not as a solution to a bear market. 


(4) This isn't anything that an advisor says. It has more to do with how an advisor reacts to your concerns. You want an advisor that takes your concerns seriously never blowing them off.

I couldn't tell you the percentage. However, I speculate that the higher percentage of advisors and mutual fund managers (know this for a fact) have not dealt with the severity of a bear market. Therefore, make sure you are with the right person.

For a second opinion of your retirement, send me an email at or call Judy at 972-386-0384. There is never a cost for a review and opinion.

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