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Get Wise to Your Advisor: How to Reach Your Investment Goals Without Getting Ripped Off

Get Wise to Your Advisor: How to Reach Your Investment Goals Without Getting Ripped Off

Steven D. Lockshin

ISBN: 978-1-118-69886-0

Sep 2013

272 pages



The financial services world is changing. Technology is enabling an automated approach to investing that should bring down the cost of commodity services.  No longer do you have to fund the lifestyle of a broker or advisor to have him tell you how to diversify or where to find the next investment that cannot be missed.  This book will provide the tools for calculators that tell you most of what you need to know; from how much insurance you need to have to how you should diversify.  The book will help readers with the following: 

  • Understand what you have
  • Plan your long-term goals
  • Start to save (maximizing your 401k)
  • Reduce debt
  • Run your Monte Carlo Simulation
  • Determine the appropriate asset allocation
  • Set up your auto-rebalancing and periodically (annually, perhaps) re-examining your asset allocation to account for globalization
  • Deploy the asset mix through low cost, tax-efficient strategies
  • Look at it once per year

This book will provide a better understanding of your investment decisions. But, we all cannot be do-it-yourselfers. Advisors serve as an important resource for consumers when they are both capable and understand their duty to serve you, the customer, first.  To complement their moral station, they must have the skills to deliver appropriate advice.  The book, much like the company Steve founded, will simplify standards for consumers and audit advisors to those standards. 

Preface ix

Chapter 1 Is This Any Way to Choose an Advisor? 1

Bad Financial Medicine 3

A Murky Industry 7

“You Should Meet My Guy” 11

Key Points 17

Chapter 2 Wall Street’s Dirty Secrets 19

The More Things Change 23

“You Don’t Understand ” 28

Misplaced Interests 33

Brokers and Advisors 35

Wall Street Brokers versus Main Street Consumers 37

Peddling Products 39

Omission versus Commission 42

Key Points 45

Chapter 3 The Wall Street Whitewash 47

Image Is Everything 49

Shopping Shortcuts 52

Vegas Rules 59

Key Points 65

Chapter 4 Hold Your Nose: Other Advisor Options 67

Bank-Based Advisors 70

Private Banking and Trust Departments 72

Asset Managers 74

Insurance Salesmen 76

Fee-Only Planners 78

Other Options 79

Technology’s Triumph 81

Key Points 86

Chapter 5 The Case for Independent RIAs 89

The Trouble with Fee-Only Advisors 92

The Case for Independent RIAs 94

Buyer Beware 99

Do All RIAs Live Up to Their Title? 102

Disorienting Disclosure 105

RIAs: A Good Place to Start 115

Key Points 115

Chapter 6 Our Lazy Brains: Why We’re So Bad at Choosing Advisors (and Investing Our Own Money) 117

The Gut versus the Mind 121

Salesmanship 101 125

What You See Is All There Is 128

My Advisor Is Handsome, So Why Am I Broke? 130

Why We Stink at Managing Our Own Money 136

Key Points 142

Chapter 7 How to Be Your Own Investment Advisor 145

Don’t Let Costs Mug Your Returns 156

How to Win the Game by Not Playing 163

Software-Powered Investing 179

Math First, Emotion Second 183

Why You (Probably) Still Need a Financial Advisor 184

Key Points 185

Chapter 8 Choosing an Advisor: Know What You Don’t Know 187

You Are the Family CEO 191

Core Principle: DUTY—Clients before Profits 193

Core Principle: SAFEGUARDS 198

Core Principle: PROFESSIONALISM 201

Decoding your Advisor’s Answers 205

After the Interview 215

Key Points 217

Chapter 9 Fees and Ice Cream: Baskin-Robbins Got It Right, Why Can’t We? 219

Chocolate and Vanilla 221

Baskin-Robbins 31 3 Flavors? 223

Key Pricing Ingredients (Building a Custom Sundae) 227

Chapter 10 Change the Game 231

Why Wait? 240

Afterword: Advisors in Perspective 243

About the Author 247