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Independent Advice for Your 401(k)? Coming Soon. Maybe.

Jun 12th, 2009
by jblankenship.
1 comment

There is a bill coming up for vote in committee (House Education and Labor Committee) soon that proposes to address the issue of independent advice for your investing activities in your 401(k) plan.  I wrote about this problem a while ago: in this post here and a little bit here.

409-conflict-by-ape-ladThe wonderfully-named Conflicted Investment Advice Prohibition Act of 2009 reckons to disallow conflicted advisors (those who are beset with conflicts of interest in providing advice) from providing employer-sponsored advice to 401(k) plan participants.  Namely, those advisors who stand to benefit personally in terms of compensation from the counsel that they might provide to 401(k) plan participants.

This is very important legislation because earlier this year, the Department of Labor completed a ruling that gives permission to the brokerages and investment houses to provide advice to 401(k) plan participants (this was a clarification of a law set forth in the Pension Protection Act of 2006).  The advice that they provide represents major conflicts of interest for the participant, since the advisor stands to benefit from various choices made with the plans.

While I believe it would be beneficial to the 401(k) plan participant to have investment advice available to them as they make decisions about their investments, I believe that conflicted advice doesn’t fit the bill.  The appropriate advice would be independent of compensation-oriented conflicts of interest – meaning the advisor is not related to the custodian and receives all compensation from the participant or the participant’s employer. Period. Oh yes, and the advisor should act as a fiduciary on the participant’s behalf.  Not too much to ask, don’t you think?

Look for more updates as this legislation moves its way through.

Reasons #12 & #35 That You Might Need A Financial Advisor

Jun 7th, 2009
by jblankenship.
2 comments

bob-dylan-by-stoned59Trying not to be self-serving with this – I am, after all, a financial advisor.  The point of this post is to explain that, in spite of all of the negative press that folks in the financial advice-giving business have been receiving of late, there are still very good reasons to have an advisor on your side.  You definitely need to make sure you’ve been careful about choosing the advisor – see this article in the WSJ for some good info on that process.

The Basics

As I’ve mentioned here before on several occasions, there are three primary things that you need to do to be successful at financial stuff.  Those three things are:

  • Organization – understand what you have, where you have it, and how it is presently invested.  This is followed by developing a good plan for saving and investing toward goals that you’ve set for your financial dealings.
  • Discipline – once you’ve developed the plan, stick to it.  At the same time, continuously review your decisions to ensure that they are correct for the long term, adjusting only when positively necessary.
  • Efficiency – don’t waste time, money, and your sanity chasing the trends.  Maintain cost efficiency, tax efficiency, and time efficiency by automating your processes and avoiding superfluous moves.

A fourth tenet of success in financial dealings that I’ve mentioned recently is Purpose.  This has to do with your goal-setting, ensuring that you’ve determined your own higher purpose in life, and from that you can align your activities to be certain that you are achieving those ultimate goals for your life.

Reasons That You Might Need A Financial Advisor

One of the poor habits that we (the collective “we”, meaning most all investors) have is often referred to as “confirmation bias”.  What this means is that we 1) require much less information to form an initial opinion about something than it takes for us to change that opinion; and 2) we have a tendency to pay more attention to, and give greater weight to, information that supports our opinion than to information that contradicts our belief.

A second poor habit is referred to as “herding” – meaning that we’ll often follow what the popular press is reporting as the complete picture, rather than something with short-term meaning and little relevance to the longer term.  When herding is playing out in the upswing times, our confirmation bias causes us to hold back and not get involved early on in the herding activity.  But once we have joined the herd (too late), even if a downswing is imminent or under way, the confirmation bias that we hold so dear keeps us from “pulling the trigger” to get out (once again, too late).

The upswing/downswing behaviors are further accented by a natural human tendency to avoid recognizing losses, because they hurt more than gains feel good (2.7 times more, some researchers have estimated!). We’d be better off in the long run to pay no attention to the short term upswings and downswings and keep our eyes on the long term.

The third poor habit is our tendency to believe that activity is required to “fix” things – as well as having a short-sighted point of view.  So, even though we are investing toward a goal that is ten, twenty, or thirty years in the future, we still agonize over each quarter’s results, believing that we need to take some sort of action based upon an up or down result in the previous 90 days.

When you have a trusted financial advisor, she can help you to address these habits.  This process follows the three tenets mentioned above (four if your advisor is being totally comprehensive in helping you with your financial life).  With a properly organized financial plan, followed with strict discipline in an efficient manner, you should be able to avoid those three habits that cause so much grief.

Maintaining the long term view often means having to “sit on our hands” – because the three habits I mentioned above combine to nearly force us to do something, when the right move is to do nothing.  As has been quoted many times of late: Don’t just do something, sit there!

Photo by Stoned59

Fiduciary Standard for All Advisors?

May 17th, 2009
by jblankenship.
No comments yet

dog-in-suit-by-matt512There has been a raging debate going on in the financial advisory world.  You see, there are two primary governing bodies for folks in the financial services business:  the Securities Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).  There are others, literally dozens, but these are the two primary governing bodies.

The Players

The SEC, an arm of the US federal government, has regulatory authority over Registered Investment Advisors (RIA) and Investment Advisor Representatives (IAR) who provide investment advice pursuant to the Investment Advisors Act of 1940 (the ’40 Act).  These folks are advice-givers first and foremost, and are held to a fiduciary standard.

FINRA, on the other hand, is a Self-Regulatory Organization (SRO) which regulates Registered Representatives of brokerage companies, among others.  The people in this group are brokers, sellers of products first and foremost.  Members of FINRA are held to a suitability standard.

The SEC was  created in 1934 with the passage of the Securities Exchange Act (the ’34 Act) created in 1934 and FINRA’s predecessor, the National Association of Securities Dealers (NASD), was created in 1939 due to some amendments made to the ’34 Act.  The prime reason I’m giving you this history is to show you just how long the tail can be for legislation passed during times of national economic crisis – these organizations have been operating for 70 and 75 years following their creation in response to situations that developed prior to the (and some believe had direct cause for) the Great Depression.  Legislation that is being considered today could have similar monumental impact.

But enough history for now – there are literally tons of nuances to consider throughout the history of these two organizations, but the question at hand is the standard to which folks in the financial services sector are held.

Definitions

Fiduciary Standard – A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence.  A fiduciary duty is the highest standard of care at either equity or law. A fiduciary is expected to be extremely loyal to the person to whom he owes the duty (the “principal”): he must not put his personal interests before the duty, and must not profit from his position as a fiduciary, unless the principal consents. The word itself comes originally from the Latin fides, meaning faith, and fiducia, trust. (from Wikipedia)

Suitability Standard – brokers are required to: 1) know their clients’ financial situations well enough to understand their financial needs, and 2) recommend investments that are suitable for them based on that knowledge. Brokers are not required to provide upfront disclosures of the type provided by investment advisers, including, but not limited to their conflicts of interest.

The Debate

Financial planners, financial advisors, etc. (for there are many names by which advisors call themselves) are not per se regulated by one standard or another, but rather it depends upon the situation.  Certified Financial Planner™ practicioners (CFP®) are held to a fiduciary standard by the Certified Financial Planner Board of Standards, while most other credentials do not carry such a standard requirement.

It is apparent that the suitability standard is a portion of the fiduciary standard: if a person is operating as a fiduciary, putting the client’s interests first, then investments recommended are by definition suitable to the client’s situation.  The industry recognizes that there is a lot of confusion in the way things are presently laid out, and are working toward a single standard for both types of advisors.

Folks presently held to the suitability standard argue that the fiduciary (often referring to this as the “f-word”) standard is aspirational in nature, where the suitability standard is very clear and direct.  On the other side of the spectrum, those held to the fiduciary standard believe that the inclusion of the FINRA brokers in this standard would serve to dilute the standard – that there would be “degrees” of fiduciary standard to which some folks would be held, while still claiming the mantle.

This is particularly newsworthy as recently the head of FINRA indicated that he thought there should be a single standard, and that he thought the fiduciary standard was the appropriate direction.

The Real Question

The burning question in my mind is this: from the consumer point of view, do you care?  Did you even know about these two standards in the first place?  Did you know that when you go to a brokerage and ask for advice, that the primary standard to which the advisor is held is to ensure that whatever they have for sale is in some way suitable to your situation even if it’s not necessarily in your best interest?  For example, it is entirely possible for a broker to consider a high-cost annuity suitable to your situation, even though it’s not necessarily in your best interest.

This debate means a lot to folks in this industry, and I think it’s pretty clear what you’d probably like, but I just wondered if you care enough to comment on it.

Photo by matt512

Problems and (proposed) Solutions for 401(k) Plans

May 6th, 2009
by jblankenship.
4 comments

The 401(k) plan has been under a great deal of scrutiny lately, with quite a few proposals being offered to “fix” the system.  Granted there are a few problems with the system that is in place, but the overall concept is still good.  What follows is strictly my opinion of some of the real “problems” followed by a look at the presently proposed solutions that are being dallied about.

will-eat-for-food-by-altemark

The Problems With 401(k) Plans

Note: for the purpose of this discussion (and most discussions here) the term 401(k) is used to refer to all CODA (Cash Or Deferred Arrangements) such as 403(b), 457, etc.. In my opinion all these plans should be treated equally.

Problem: To start with, it makes so very little sense to strictly tie the plan to the employer.  Of course, this made a lot of sense when employer matches could be solely in company stock (a la Enron), but these days the whole concept is outdated.

Solution: Do away with the present system of tying the plan to the employer.  Instead, simply increase the annual limits on IRAs to the same limits for 401(k)s – let all folks take part in these plans.  Employers could still have the tax benefit for matching funds, but the “portability” issue would be gone, as would the need for all these rollover activities.  Level the playing field, making the rules that are currently IRA- or 401(k)-specific apply to the new IRA plan.

Problem: 401(k) plans have limited investment choices, many of which are inappropriate or inadequate for the investor’s situation and goals.

Solution: Under the “new IRA” option I mentioned above, the field would be open to all investments available from your custodian.  Custodians would soon learn to allow investments in virtually all available securities, as the investor can easily “vote with his feet” and move elsewhere with better choices.

Problem: There is no “guaranteed income” choice available in the 401(k). Since the original intent of the 401(k) was to replace the defined benefit pension plans – you know, the kind of pension where you’re guaranteed an income, often inflation-indexed, for life – it seems like you should be able to emulate that in a 401(k) plan.

Solution: There have been a few suggestions on the table in Congressional committee where annuity products would be made available for 401(k) investments.  The problem here is that, unless we’re talking about the lowest of low-cost providers (and there are a few out there), annuities are traditionally a very costly way to save and invest for the future.

I can’t argue with the sentiment, a guaranteed income choice would be perfect for a high percentage of folks – unfortunately this whole concept sounds too much like Social Security, and I don’t think we want to have two systems like that going in parallel. This option is still open for debate, in my opinion.

Problem: Most folks who have a 401(k) plan don’t have a clue about investing, and don’t have access to affordable, unbiased, professional advice.

Solution: This was actually addressed to a degree during the previous administration with the Pension Protection Act, but apparently the legislation’s carrot wasn’t enticing enough to get the ball rolling.  In addition, the previous legislation did not go far enough and label the advisor as a fiduciary – a step that I believe is critical to the long-term success of the investor.

Some of the proposals on the table now have taken the step to require fiduciary advisors.  The problem now is to get companies to implement this option.  Mandating is it probably going too far, but offering tax cuts or other benefits may be useful in giving this some traction.

Conclusion

This wasn’t intended to be an exhaustive list of the issues and solutions, just a list of the top things I’d been thinking about lately.  As I indicated before, I don’t think we need to toss out the baby with the bathwater; the 401(k) plan isn’t broken, it just needs a few adjustments.  Maybe you’ve got a few additional ideas, or suggestions to improve what I’ve tossed out here – I’d love to hear them.  Leave your ideas as comments below.  Thanks!

Photo by altemark

5 No-No’s for IRA Investing

Apr 30th, 2009
by jblankenship.
No comments yet

prohibition-facts-by-sarahdeerIt is generally well-known that in an IRA account you have a wide range of investment choices, typically only limited by the custodian’s available investment choices.  There are, though, specific investing activities that are prohibited with IRA funds.

What’s Not Allowed for IRA Accounts?

  1. Self-Dealing.  You are not allowed to make investments in property which benefits you or another disqualified person.  A disqualified person includes your fiduciary advisor and any member of your family, whether an ancester, spouse, lineal decendant (child) or spouse of a lineal decendent.  It is important to note that this limit applies to both present and future use of a property – so if you purchased a condo and rented it out exclusively for several years and then decided to convert it to personal use, this act would disqualify the investment and potentially classify it as a distribution, to be taxed and penalized (with interest) retroactively.
  2. Borrowing.  You are not allowed to borrow funds from your IRA account.  Likewise, you are not allowed to put up your IRA account as collateral for a loan.
  3. Selling.  You are not allowed to personally sell property to your IRA account.
  4. Collectibles.  The single class of investments that you may not invest in from your IRA account is collectibles.  This includes art, antiques, gems, coins, and alcoholic beverages, among other items.  There is an exception to the coin prohibition, in that you are allowed to invest in one, one-half, one-quarter, or one-tenth ounce U.S. gold coins, or one-ounce silver coins minted by the Treasury Department with your IRA funds. You can also invest in certain platinum coins and certain gold, silver, palladium, and platinum bullion.
  5. Unreasonable Management Costs.  It is prohibited to pay an exorbitant amount to an advisor to manage your account.  This is due to the fact that it IS an allowed transaction to pay your advisor, tax-free, from your IRA specifically for managing the account.  If the amount is deemed unreasonable (e.g., obviously for services above and beyond managing the IRA account), this transaction is prohibited.
  6. (bonus!) Life Insurance. You may not purchase life insurance contracts with your IRA account funds.

Beyond these transactions, IRAs have a pretty wide scope of available investment options, as I indicated before, mostly limited by the custodian’s available investments.  In cases where the IRA funds are to be used for more complex investments, such as individual real estate transactions, a special custodian is often required, as these transactions can be very difficult to complete and manage over time and maintain the tax-qualified status.  If you’re interested in such a transaction, let me know and I’ll be happy to put you in touch with such a custodian.

Comprehensive Financial Planning – Explained

Apr 26th, 2009
by jblankenship.
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albert-and-the-puzzle-by-emdotFrom time to time, the question is asked of me: What exactly makes up a comprehensive financial planning engagement?  Since you know from reading about my practice that I operate in an hourly, fee-only fashion, you should know that a truly comprehensive financial planning engagement requires 10 to 15 hours of effort by the financial planner.

What exactly makes up a comprehensive financial planning engagement?

Each individual situation is going to be different, and so your mileage is likely to vary from my explanation, but what I’ll do, as a starting point, is list out the areas that are typically covered in what I’d call a comprehensive plan:

  • goal-setting – spending time understanding the wishes and desires of the client, and quantifying them in terms of time horizon and costs for use in planning; this can include retirement, college, home purchase or remodel, opening a business, parents moving in, and just about any major financial event
  • priority-setting - understanding the relative importance of each goal
  • risk analysis – explaining to the client the concepts of risk, how risk is required for return, and garnering an understanding of the tolerance level for risk given the timelines and current financial condition
  • cash flow – review of financial flows, finding those “unknown” expenditures that can be harnessed toward financial goals; understanding near-term and long-term requirements for cash flow; review of prior tax returns for any isssues there as well
  • present financial condition – review of present accounts, allocation, future inflows into those accounts; present position with regard to debt, as well as future debt planned and debt to be retired
  • projection of future cash flows – modeling the future as it pertains to the goals stated, with regard to the present financial condition and assumptions made about holdings, inflows, taxes, debt, and timelines
  • risk management – review of current insurance coverage(s), especially with regard to life, disability, and long-term care insurance needs, both now and in the future, given results from the future cash flow projections; this often also entails a review of employer-provided benefits and recommendations for participation therein
  • estate planning – review of present accounts, ensuring appropriate titling and beneficiary designation both now and in the future, given results from other components of the planning process
  • strategy development – this can entail anything from tax planning to portfolio development to insurance recommendations, debt reduction, distribution planning, and opening and funding the appropriate accounts.
  • communication of the results/recommendations – sometimes this takes a couple of hours or more on its own. The point is that the client comes away with a thorough understanding of the recommendations and the reasoning behind them.
  • implementation – not always required, but often is requested. I spend time helping the client open accounts and making allocations if required, implementing insurance coverages (reviewing policies and the like), implementing tax strategies, etc. – or sometimes the client turns the implementation completely over to me.
  • follow up – regardless of the one-time nature of your example, plans are reviewed after approximately one year to ensure that circumstances have not changed dramatically (with regard to the information that I have on hand). If the client doesn’t wish to engage in formal follow up review, then the engagement is complete.

The Reality – What Really Is Involved

Now, given the fact that a typical comprehensive financial plan entails at least three meetings with the client, each lasting on average one and a half hours, that leaves five and a half hours (on the low end) or ten and a half hours (on the high end of my estimate) to cover the remainder of the activities I’ve listed. In the case of the lower end of the spectrum, some of the components are either eliminated or reduced in scope. For example, if the client only has a 401(k), no debt other than his mortgage, is single and has no children – then obviously the planning cycle is reduced, due to the reduction in planning factors.

Now, the other thing is that many financial planners (myself included) notoriously underrecover – that is, we often spend more time on the plan than what we bill, due to additional research required, or additional time required for communication of the recommendations, or any of a myriad of activities.

Hope this gives you an idea of what is involved in a typical financial planning engagement.

401(k) Fair Disclosure for Retirement Security Act of 2009

Apr 22nd, 2009
by jblankenship.
2 comments

In addition to the “tweaks” that I talked about in this post, more components of the 401(k) landscape are receiving focus.  In this particular case, we’re aiming for more disclosure and information about fees for plan participants.

401(k) Fair Disclosure for Retirement Security Act of 2009

symmetry-by-j_fiSpecifically, under this bill, 401(k) plan participants would receive information on risk, return, complete fees, and investment objectives before signing up for a plan. Plus, the fee amount for each account would be disclosed on the participant’s quarterly statement.  This may be a huge eye-opener for 401(k) plan participants, as these costs have never been disclosed to participants in the past – at least in any easily-digestible way.

In addition, the administering firm would have to provide the employer (the plan sponsor) with a complete breakdown of all expenses, including administrative fees, transaction fees, investment management fees, and any other fees charged to the overall plan.

The most controversial aspect of the legislation is the requirement that all plans provide at least one low-cost index fund, either indexed to the total stock market, the total bond market, or a combination of both.  The managed mutual funds industry has long been opposed to this component, with the argument that the plan sponsors should be free to choose any investment option they desire.  I think that the index option is a great alternative, and does nothing to negate the plan sponsor’s ability to choose a plethora of additional investment alternatives.

401(k) Plan Tweaks

Apr 15th, 2009
by jblankenship.
2 comments

How many times recently have you heard the line “Well, I looked at my 401(k) statement and now it looks more like a 201(k).  Hahahaha!” ?  And are you getting pretty sick of that line like I am?  I mean, for cryin’ out loud, there’s not even a §201(k) in the Internal Revenue Code! How ridiculous is that!? Heh… heh.  Well, that line kills ‘em at the accountant’s conventions, trust me.

But seriously – we’ve all been hurt, hurt bad, by the market downturn that occurred late last year.  And it’s not just 401(k)’s that were hurt: IRAs, taxable accounts, Roths… everything has been spanked.  But the 401(k) is a dominant type of account that millions of Americans own and are painfully familiar with, and so this type of account has garnered special attention of late, by our nation’s lawmakers.

1nt-by-jo-jakeman1Tweaks For 401(k) Plans

You see, it has been a topic of conversation in Congressional committee circles of late, that the 401(k) is the root of all the pain we’ve been experiencing, and as such, being “broken”, someone needs to “fix” it.

What’s Wrong?

By all rights, the mere existence of the 401(k) plan probably has a lot to do with the specific pains many investers are feeling:  without the 401(k) (and lots of ancillary 401(k)-like accounts such as the 403(b), the 457, etc.) most Americans would have little if any involvement in investing decisions.  After all, the lion’s share of the IRA market is made up of IRA rollovers from these qualified defined contribution plans – and therefore individual investment (brokerage or mutual fund) account ownership used to be a fairly insignificant percentage.

When the 401(k) plan was introduced, its primary function was to take the place of the costly define benefit pension plans that corporations were beginning to abandon.  The thinking was that, instead of using corporate monies to fund the pensions, employees could defer current income into an account, which would grow over time and provide a source of retirement income, replacing the pensions.

The concept itself isn’t bad – a benefit is that the employee now had much better insight into his or her own retirement, therefore having an incentive to save.  The company benefits because it doesn’t have the liability of the pension to provide for the lifetime income stream.  The employee benefits further because the company increases his income or matches his contributions, plus, the employee can opt out of the plan if he chooses, providing more disposable income.  The end result though, is that the employee takes on nearly all the risk, with little, if any guidance.

The Root Problem

The problem that wasn’t addressed is the root of the issue: the pension plans were being abandoned because it was so costly to provide a guaranteed lifetime income stream, in part because managing the pension trust fund, investing the inflows and planning the outflows, requires the expertise of a fiduciary advisor.

As originally envisioned, the 401(k) plan participant would use his financial advisor to help him with investing decisions.  The problem is that the average worker doesn’t have a financial advisor that he works with, and so this critical advisor was replaced with documentation, seminars, and training that has been woefully inadequate.  The average 401(k) participant blindly chooses investments from the paltry choices allowed, not really understanding the concepts of diversification, risk/reward matrices, or general allocation principles.

One of the options that has been discussed in Congress lately is to further incent employers to provide investment advisors to employees, in order to help the employee with the process of investment management.  The Pension Protection Act of 2006 had a provision that opened the door for this sort of assistance from employers, but an incomplete definition of “independent investment advisor” has kept most employers from acting.

Current thinking is that new regulations will be put in place that will give greater incentive to employers to implement an advisory program – as well as to define “independent investment advisor” as an advisor who has no vested interest in any investment choices by the employee-invester.  this conflict-free advisor would also be required to operate as a fiduciary for the employee.

Another possible option that could be implemented is investment alternatives that would provide a conservative choice, possibly a lifetime income stream option, such as an annuity.  The primary downside to annuities has always been the high costs and “black hole” nature of the underlying investments.

In order for this to work, the annuity products would need to be aggregated in very large numbers in order to reduce the overall cost structure enough to be viable.  In addition, the providers will need to give much more transparency to the process in order for the advisors to be capable of assessing the option as an alternative.

The conclusion is that the 401(k) is not broken – it just needs some tweaks.  And from what I’m hearing about current discussions on Capitol Hill, it sounds like the tweaks being suggested are a definite step in the right direction.

Snake Oil Sales, 2009 Style

Mar 17th, 2009
by jblankenship.
No comments yet

By now you’re probably sick to death of the conversation around the Jim Cramer vs. Jon Stewart ratings booster.  If you don’t know what I’m referring to, you can find a CNN report about the whole affair here (sorry, the video has been removed).

snake-oil by healthcare-savantAn interesting point in all of those conversations is that, in spite of what you may think, Jim Cramer, or Suze Orman, or Bob Brinker, or even (heaven forbid) Dave Ramsey, are entertainers first and foremost.  Jon Stewart was on the nose when he said that both he and Cramer are snake-oil salesmen.  It is their job to attract listeners so that advertisers can push their products.  In between these product pushing moments, these folks do their best to provide provocative responses to the issues (in this case financial issues) that are on our minds.  But it must be entertaining, or we (the consuming public) won’t watch or listen.

Granted, it is in the best interest of the host or hostess to provide correct answers and information - but often there are answers given with an air of certainty that is at least inappropriate, possibly even unwarranted.  Each individual needs to understand that with every recommendation there is a disclaimer: This probably doesn’t exactly fit your specific situation. Since the entertainment is designed to be attractive to the widest possible audience, bits and pieces of every show may fit your situation, but most likely you need to filter the information to truly meet your needs.

This is not to say that these folks don’t give good advice.  Of the four I mentioned, you could certainly do worse than listening to any one of them.  Perhaps even better, follow all four (and add some of your own to the mix) and then come up with your own blended strategy.

Because in the end, no matter how mad you may be at Jim Cramer et al, it ultimately is your own decision to make the moves you make (or choose not to make).  Hold yourself accountable – learn enough about your finances to understand what you’re hearing and make good choices.  Have a trusted advisory group (family members, friends, co-workers, me, etc.) that you can ask questions of and receive unbiased answers.

Take recommendations from expert advisors, but also understand what you’re agreeing to.  Blind faith in an advisor led to Bernie Madoff’s getting away with billions.  Question everything – a true fiduciary advisor will welcome the opportunity to explain things.  If your advisor hesitates to explain her recommendations, you need to start looking for another advisor.

It’s important to have information at your hand and in your mind when making decisions – but remember to get more than one single opinion, and to keep your trusty grain of salt handy.  This wouldn’t necessarily have saved you from the market downturn, but it may have helped.

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