What level of oversight should I have on my investments, if they are in a retirement account and/or managed by a professional?

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  • 5 out of 5 people found this answer helpful

    CFA, CFP® San Rafael, CA

    Whether your investments are in a retirement account or with an investment manager, it is extremely important that you check up on them, both quarterly and annually.

    Consistent reviews will help you answer key questions:

    What is the value of your investments?

    Do the investments still meet your objectives?

    Is the fund or manager doing a satisfactory job?

    Monitoring the total value of your investments quarterly alerts you to trends. No surprises! If you are caught off guard opening an envelope to discover that your accounts have lost 25% of their value, you may panic and sell at the worst possible time.

    Investing is risky. Quarterly assessments let you ask yourself how you are feeling about the swings in value of your investments. If the ups and downs are giving you vertigo, maybe the mix of investments you have is too aggressive and needs adjusting.

    The annual evaluation helps you look at your long-term goals in the context of performance – how are your investments doing, overall? Are they meeting your objectives?

    Are you on track to reach retirement goals, such as accumulating a desired amount of assets? In an off year you may need to make adjustments, either by saving a little more or changing the investment mix. Does the current mix balance your need for growth with your tolerance for risk?

    Although the annual performance evaluation of your funds or investment manager only provides a report card for a single year, it is a good idea to do it. It will help you stay in touch with the bigger picture. If an investment or investment manager is not delivering as expected over a number of years, you need to be aware of this and “keep score.” A “growth” mutual fund may do poorly in a strong stock market year. If it continues to perform differently from similar funds in the same category, this is cause for concern. If this fund continued to lag for three years, I would look for a replacement.

    When evaluating an investment manager, you need to establish benchmarks of performance. The manager can provide guidelines for measuring his or her services to you, such as outperforming the S&P 500 or some other index. Other questions may be more meaningful. Are you making progress toward your investment goals, e.g., retirement savings? Are your investments growing faster than the rate of inflation? Is the market going up while your account is going down? An investment manager’s job is to provide answers to these questions. Establishing agreed upon benchmarks is key. Comparing these targets to the performance of your investments gives you a good sense of how the investment manager is doing.

    If the ins and outs of tracking your investments seem too complex or beyond your interest level, hiring professional help may benefit you. But there is no substitute for paying attention!


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  • 3 out of 3 people found this answer helpful

    CFP®, MSFS San Luis Obispo, CA

    Let's start with this ... it's your money, not the advisor's. That means ultimately you're on the hook for what happens to it. As such I believe you should have a basic understanding of: (1) how the account is invested (what types of assets), (2) the types of risk to which your money is exposed and (3) the basic investment policy that the manager is following.

    You shouldn't watch the balance every day, but you once a year isn't enough either. Depending on your personality, monthly to quarterly checks are appropriate or more often if there is a lot of activity in the account (visible through the monthly statement).

    The investment policy should be a written document using language that you understand. And as Bonnie said, if your advisor isn't happily taking your calls and explaining what they are doing, it's probably a good time to find a new advisor.

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    Advisors offer free consultations to determine if you're a good fit for one another. Providing more information in the consultation request will help advisors have a better sense of what you're looking for. The advisor will contact you via email and set up a time to meet. Depending on the advisor, and your preferences, this could be an in-person or online meeting. You are under no obligation to engage them after meeting with them.
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  • 3 out of 4 people found this answer helpful

    AIF®, CFP® Pleasanton, CA

    This is a great question!  If your investments are managed by a professional, here are some important steps to ensure you're getting the attention you need:

    1. Determine if they are willing to sign a fiduciary pledge on your behalf.  This legally requires them to put your interest ahead of their own, especially in the area of compensation.  While all financial professionals say they’re helping clients, you have to get the fiduciary pledge in writing if you want peace of mind.
    2. Understand their investment strategy.  Are there any independent, third-party sources that verify their strategy works?  How long have they been using this strategy? Understand how the advisor gets paid.  Do some investments they recommend pay them more than others?  If so, they have a conflict of interest and their employer may pressure them to sell the products with higher commissions.  Going back to the fiduciary, an advisor whose compensation varies depending on what investments you buy can’t sign a fiduciary pledge.
    3. Understand their process for selecting and monitoring your investments.  What are their criteria for selecting among the tens of thousands of choices available?  How will your portfolio help you accomplish your personal goals?

    Once you understand all of these things, you should be able to setup a schedule to review your progress with your advisor.  You should have online access to see the value of your accounts daily, but you probably don’t want to spend that amount of time doing so, and focusing too much on daily prices shifts your focus away from larger issues that impact your portfolio.

    Gary E.D. Alt, AIF®, CFP®

    www.MontereyPrivateWealth.com



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    Advisors offer free consultations to determine if you're a good fit for one another. Providing more information in the consultation request will help advisors have a better sense of what you're looking for. The advisor will contact you via email and set up a time to meet. Depending on the advisor, and your preferences, this could be an in-person or online meeting. You are under no obligation to engage them after meeting with them.
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  • 2 out of 3 people found this answer helpful

    CFP®, ChFC, EA Redwood Shores, CA

    The level of oversight should be commensurate with your comfort level.  If you feel compelled to check your managed investments more often than monthly or quarterly how comfortable are you with the investment professional to whom you delegated your accounts?  That said, whatever frequency you select, it should be consistent. Neglect is not a good investment strategy. Checking your accounts regularly helps keep you focused on the desired long-term outcome, your progress towards it and keeps the relationship with your advisor vibrant. 

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    Advisors offer free consultations to determine if you're a good fit for one another. Providing more information in the consultation request will help advisors have a better sense of what you're looking for. The advisor will contact you via email and set up a time to meet. Depending on the advisor, and your preferences, this could be an in-person or online meeting. You are under no obligation to engage them after meeting with them.
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  • 3 out of 6 people found this answer helpful

    AIF®, CDFA, CFP® Leesburg, VA

    My clients don't need to do the analysis I do, get the education I have, or manage millions but I want them to have a reasonable understanding of what they own and why they own it.  We connect it to their goals and that usually assists understanding.  Oversight should always be available to you and because there are no stupid questions when it comes to your own money, you should expect that your advisor will take the time necessary to ensure that you have a reasonable understanding of what you own and why you own it. 

    If that isn't offered or available, I'd seek another professional.  If you ever feel intimidated by asking questions about your own money, that's a signal that you don't have oversight, you simply have what the advisor wants you to have.

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  • 0 out of 0 people found this answer helpful

    CFP®, MBA, MSFS Irvine, CA

    I think professional management has limited value in a 401k plan if you are going to use Target Funds or lifestyle funds.

    If you are going to try and build a portfolio from the funds available in the 401k, then a professional manager would be a good investment to make sure you have calibrated the right amount of risk for the expected return.

    If you have a nonqualified portfolio (money not in your 401k or IRA) and you have hired a money manager, you might be wise to get a second opinion. This is especially true if your portfolio is not keeping up with market index funds.

    It never hurts to have someone else, you trust, review your progress.


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    Advisors offer free consultations to determine if you're a good fit for one another. Providing more information in the consultation request will help advisors have a better sense of what you're looking for. The advisor will contact you via email and set up a time to meet. Depending on the advisor, and your preferences, this could be an in-person or online meeting. You are under no obligation to engage them after meeting with them.
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    Marietta, GA

    You should be able to verify your account balances with a third party on a daily basis if that is what you wish.  Remember it is your money.

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    Advisors offer free consultations to determine if you're a good fit for one another. Providing more information in the consultation request will help advisors have a better sense of what you're looking for. The advisor will contact you via email and set up a time to meet. Depending on the advisor, and your preferences, this could be an in-person or online meeting. You are under no obligation to engage them after meeting with them.
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    Dallas, TX

    If your investments are managed by a professional, your investment accounts should be held at a 3rd party custodian and you should be able to login online and view your accounts at your discretion.

    You advisor should develop an investment plan for you, he should be able to clearly explain it to you, and he should discuss the strategies he is going to employ to achieve your goals. You should meet periodically(quarterlyor twice a year) with your advisor to discuss how things are going and you should be proactive and let your advisor know if you have life changes that could impact your investment strategy.

    Lastly, your advisor should be a resource and partner for you.
    He should put your interests first. There can be a big difference between a fee based advisor and someone that sells brokerage or insurance products for a commission.

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    Advisors offer free consultations to determine if you're a good fit for one another. Providing more information in the consultation request will help advisors have a better sense of what you're looking for. The advisor will contact you via email and set up a time to meet. Depending on the advisor, and your preferences, this could be an in-person or online meeting. You are under no obligation to engage them after meeting with them.
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    La Jolla, CA

    I know many people who rarely look at their statements and some of those people are served by investment advisers who don't contact them more than once a year.  That is scary. It is your money and you should be up-to-date on how it is working for you. Markets can change quickly and your investments can be impacted.  I recommend you check your statements at least once a quarter.

    Even though your money is being managed professionally, you have the opportunity to learn from that professional.  Consider education part of your fee so take advantage of that.  Go online and Google how the S&P 500 has fared YTD, and over the past one, three, five and ten years.  How does your portfolio compare?  In a bull market is your return lower because you are taking less risk?  Is your return higher because you are taking on more risk?  What is happening during a flat or bear market?  This is your opportunity to understand the philosophy and investment management style of your advisor. Your needs may change over time and if your current adviser can't adapt to your needs, it is time to consider changing advisers.

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    Advisors offer free consultations to determine if you're a good fit for one another. Providing more information in the consultation request will help advisors have a better sense of what you're looking for. The advisor will contact you via email and set up a time to meet. Depending on the advisor, and your preferences, this could be an in-person or online meeting. You are under no obligation to engage them after meeting with them.
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    CFP® San Jose, CA

    Your money should be located at a third party custodian where you have an online portal and access to monthly or quarterly reports. You should have selected your investments personally, or, if working with a professional, you should have agreed to a particular methodology. I have Limited Power of Attorney on all of my clients' accounts, where I am able to invest their money in a portfolio that has been pre-agreed upon as well as do trading to raise funds or buy into more of the investments in the case of a deposit. You should be able to terminate your relationship with any professional who invests your money at will and immediately without contacting them (by contacting the third-party custodian in many cases). 

    You should have an understanding that the investments you have chosen or selected with a professional are appropriate for you and follow an investment philosophy that is documented and well-evidenced. 

    Was this a helpful answer?

    Advisors offer free consultations to determine if you're a good fit for one another. Providing more information in the consultation request will help advisors have a better sense of what you're looking for. The advisor will contact you via email and set up a time to meet. Depending on the advisor, and your preferences, this could be an in-person or online meeting. You are under no obligation to engage them after meeting with them.
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