Why You Should Get a Second Opinion About Your Investment Portfolio

Are you pleased with your plans and path towards retirement? Are you happy with the legacy you will leave behind for your loved ones?

Even if you have an investment portfolio that appears sound, a second opinion can always help to increase your confidence. In fact, you may find that it puts you in a much better financial position.

If you have a wealth plan in place, you should consider getting additional advice. Below, we discuss why you should consider our second opinion review.

The Importance of an Adaptable Financial Plan

If the human race has learned anything over the past few years, it is that life changes quickly. Within a minute, financial markets can turn, and investments can change with them. To combat this, you need a financial plan that is flexible and able to adapt to change yet steady and able to stay the course.

As well as investments, your financial situation itself may change. In fact, there are many inflection points that are probable throughout our lives and each with the potential to alter our course. You could have an increase or drop in income. You may have an influx of wealth, such as an inheritance. Injury, death, and other setbacks are not the only items to plan for.

To ensure you are heading toward a sound, stable future, a financial plan is a must. Imagine it as a map pointing out resources and risks, as well as path towards the completion of your goals. A great plan will have the strategies needed to work towards your dreams and tactics needed to plan for the certainty of uncertainty.

It is also important to know that wealth management is not the same as a financial plan. As the old saying goes, if it’s not written down, it’s not a plan.

Second opinions should provide clarity into your current financial position and strengthen your knowledge on the differences between wealth management and holistic financial planning. Both are important to your future and both require various skillsets. Second Opinion reviews should also offer relief to stagnant or outdated financial plans as well as simplicity to lengthy printed materials chalked full of spreadsheets and graphs.

If you desire the opportunity to identify areas that are working and areas that need adjustments, lean on our team. We are comfortable in confirming best practices already implemented and identifying reasons for change.

Working With a Fiduciary

Fiduciary derives from the Latin word “fiduciary,” which translates as trust. This is used in legal circles to describe someone who is working with the best interest of others, particularly their client, at heart. It can often be hard to know if you are working with a fiduciary or not.

A true fiduciary should be making recommendations that are best aligned with your wishes, aiming to fulfill your financial goals. A fiduciary will also ask questions that seek your involvement and your thoughts, dreams, and fears. They will check to see what strategies are in place now and which are being employed, along with what is or is not working and why. Lastly, a fiduciary is there to help make adjustments and to encourage.

Because of the intricacies and required skill sets, this is best done within a team whose streamlined process provides a customized plan.

Management of Fees and Expenses

Many people do not realize that their financial advisor is not a fee-only advisor or that they do not have the licensing to provide advice. This means you may be paying sales commissions or fees not visible on a statement.

Knowing what you are paying in fees and what you are paying for is an important part of any working relationship. Sales commissions, high internal operating expenses and hidden fees all create drag on a portfolio. A comprehensive overview of what you are paying and what you are receiving in exchange for payment, will help decipher if change is needed.

Using a Second Opinion to Make Your Plan Tax Efficient

Having a tax-efficient wealth portfolio requires knowledge of laws and takes skill to manage. Unfortunately, many financial plans ignore the concept of taxes altogether, assuming it is a given. However, with financial due diligence, there are several ways that your tax picture can better align with your goals and objectives.

The efficiency depends on several factors. A few being, are the right bonds being used in your portfolio, is tax-loss harvesting an annual discussion (if applicable), how is the topic of generosity being addressed and are various accounts being used for specific purposes.

Perhaps you feel you are paying more tax than normal, or you may believe that you could pay less. If so, then Awaken Wealth Planning can decipher what adjustments will complement your wishes.

Understanding the Level of Risk

It is very important to also understand the level of risk in your investment portfolio. If a financial advisor has not made this clear or not explained it fully, you could be putting money into investments that are not aligned with your expectations.

You can get a general level of risk by weighing the percentage of equities against fixed-income investments. Generally speaking, the higher the percentage of equities in your portfolio, the higher the risk. The question that you should have a clear answer to is, “Is your risk tolerance aligned with your portfolio risk tolerance?”

Of course, diversification of your investments is also a good strategy. If all your investments are highly correlated, that is they rise and fall at the same time, then a review of the portfolio would be helpful.

This is, of course, a very broad assumption and can delve into many different facets that a second opinion could manage for you. Equities can be divvied up into many categories, such as foreign and domestic, active or passive, sector and type to name a few.

As you get closer to retirement, a common question “is should my level of risk begin to decrease?” The answer unfortunately is not that simple. A better question while approaching retirement is “how is my portfolio aligned with my income needs, tax picture, time horizon, legacy, and what is my plan to get me there?” Is it time for a second opinion review?

Legacy Planning

For many people, the purpose of wealth management is to provide a stable, secure financial foundation for their loved ones when they are gone. The preparation for this is known as legacy planning, and it is much more complex than it sounds.

For example, if you have several different types of assets, you potentially have several different tax implications. Plus, it’s possible that each of those tax implications differs by beneficiary or recipient. If you desire legacy planning, your plan for those assets should come with as little friction and tenstion as possible.

Efficient legacy planning can minimize the hurdles associated with the distribution of assets at death. In turn, ensuring alignement of your assets and investments with your wishes.

Get Assistance

A second opinion does not implement change. Instead, its purpose is to maximize and safeguard your wealth portfolio potential.

Awaken Wealth Partners should be your first stop when seeking financial advice. We offer professional wealth management with a holistic financial planning approach. Contact us here to discuss our second opinion review and to start arranging your tomorrow, starting today.