Video Mailbag Episode 5: Should you fire your financial advisor?

Dear Pete,

After years of deliberation, and another 12 months of vetting a financial advisor, I'm concerned we made a terrible choice. We took our portfolio to them in March of last year, and since that time we've lost 9.8% of value which doesn't doesn't include the 1% advisor fee nor the .85 - 1.15% in management fees. This does not feel good, nor am I happy about it. The advisor insists we attend classes to help us stay the course. Not once have we recieved a personalize, unsolicited email or contact from them. I asked for a phone call to reset our expectations, but all he wanted to do was ask us to attend another class and said maybe we could talk afterwards.

I'm angry. Am I out of line?

Best of wishes,

Chris

From March of last year to the end of 2015, the market was down about 3% based on the S&P 500. You're down more than double that with fees. Does it mean your advisor is doing a bad job? Well, not necessarily. It all comes down to what you hired him to do. Did you hire your advisor to BE the market or to BEAT the market? If you hired your advisor to BE the market, they are doing an absolutely terrible job. A truly horrendous job. Oh, and by the way, you are paying for it. If you hired your advisor to be the market, fire them. They've done a terrible job holding up their end.

On the other hand, if you hired your advisor to BEAT the market, well... it's more complicated. Beating the market is hard to do, and last year was an extra tough year to do it. So they swung and missed, your question to them should be, how are you going to change it up this year? Firing them right now, might not be the move to make. I recommend locating a few of their other clients who have been with him for several years to see how satisfied they are. If you are trying to beat the market, one bad year and a case of buyer's remorse shouldn't be enough to let your advisor go.

Do you have a question? Cool, hit me up at AskPete@petetheplanner.com.

Check out the rest of my video mailbag series here.