Fire your investment advisor and/or broker. Make this move unless you have an extremely complicated financial situation or you cannot bear to deal with the details of portfolio management. In the latter case, you are not likely reading this blog as this is a do-it-yourself site. In the former situation – is your portfolio that much more complicated than a large pension fund? If not, then you do not need an advisor.
Consider the following arguments.
- Why is an investment advisor unnecessary for the majority of investors? Keep in mind that we are not advocating active portfolio management so this immediately removes a lot of attention one needs to devote to the portfolio. The ITA Wealth Management approach is passive or semi-passive with an emphasis on using index ETFs to populate the portfolio. This approach does not require an advisor.
- After the initial asset allocation plan is formed and we decide on the percentages to allocate to each asset class, it is only a matter of monitoring the portfolio each month when the broker statement arrives. Update any dividends or interest payments, check to see if the portfolio is still in balance, and wait one month for the next statement. I recommend a complete portfolio review once a year to make sure the asset plan fits your current financial situation. For most investors, the financial plan will not change more than once every five years, if that often. Five years before retiring and certainly once one retires, a critical look at the asset allocation plan is prudent.
- I highly recommend passive investors learn how to use the TLH spreadsheet, including the Holdings, and Dashboard worksheets, so the asset allocation plan can be monitored. This does require a little effort, but help is available on this site. Your financial advisor will not provide the information available through using the TLH spreadsheet. I guarantee that to be true.
- During the earning years the asset allocation plan will not change all that much. As new money is fed into the portfolio, it is quite easy to keep the different asset classes in balance. Just keep feeding the asset classes that are under target. The TLH spreadsheet identifies which asset classes are out of balance.
- The reason one does not need a full-service broker is that we use a discount broker where all investments are bought and sold electronically. There is no need to use a full-service broker if one is a passive investor. Save on commissions and save on advisor fees. Put that extra money to work in a portfolio built around index investments as shown to Platinum members.
Platinum membership is available for $5.00/mo. Enhance your returns and learn how to maintain and monitor your portfolio.