Friday, March 11, 2016

from Bloomingdale resident & Certified Financial Planner Chuck Donalies: "The Frugal Planner's Weekly Dispatch: What Financial Advisors Actually Do"

From: Chuck Donalies, CFP® [] On Behalf Of Chuck Donalies, CFP®
Sent: Friday, March 11, 2016 9:00 AM
Subject: The Frugal Planner's Weekly Dispatch: What Financial Advisors Actually Do

The Frugal Planner's Weekly Dispatch

What Financial Advisors Actually Do

Volume 2, Issue 11
March 11, 2016

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Here's an illustration of what a true financial advisor should do for his or her clients. Thanks to Bob Seawright for this image!

What Does a (True) Financial Advisor Actually Do?

I often meet with prospective clients who know they need some financial advice but they don't really understand what a true financial advisor will actually do for them. I completely understand why prospective clients confused and it's not their fault. I blame brokers and "advisors" who sell financial products and financial media that all too often focuses on short-term trading of the hottest stocks.

Both groups mentioned above have conditioned consumers to think investment selection is the number one job of financial advisors (Hint: It's not).

The chart above, created by financial advisor and blogger Bob Seawright, is a great illustration of the services consumers should expect to receive from a financial advisor. Notice how "Security Selection" is the smallest part of the pyramid - the complete opposite of what brokers and the media would have you believe.

If you're working with a financial advisor and not getting all of these services then I encourage you to look for another financial advisor!

Beating a Dead Horse (Not Literally, That Would be Gross)

In last week's Dispatch, I discussed the Department of Labor's much-needed fiduciary rule and its opposition by the financial services industry and House Speaker Paul Ryan. Don't worry, I'm not going rehash the issue. However, I want to share with you a Dilbert comic that illustrates perfectly why the financial services industry is terrified of the fiduciary rule.

How are brokers and other financial salespeople going to make a living if *gasp* they are forced to act in your best interest??

Scott Adams illustrates (literally!) why brokers in the financial services industry are scared of the Dept. of Labor's proposed fiduciary rule.

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