With finances, it seems that there should be a simple figure to use to measure success. But the truth is that everyone we work with will measure their success differently. Some of our clients believe that traveling for half of the year is more important than owning multiple luxury vehicles, while other clients wish to build their dream homes with all the bells and whistles so they never have to leave. In order for us to consider us successful, we work with our clients to determine what they want in life. We believe that the correct way to measure success in wealth building is to gauge whether you remain on track to reaching your desired wealth goal in the planned time period, not the actual average annual rate of return you achieve. Sophisticated investors recognize that anything else is just a distraction. Perhaps you have a goal of earning six percent a year; there will be years you’re going to be above that and years you’ll be below it. What matters is that you are achieving your financial plan at the least possible risk.
It’s for this reason that we suggest an independent, registered investment advisor (RIA) when you’re searching for a personal investment advisor. That means that you want a professional who is only going to make decisions in your best interests. If you are not using an RIA, you are most likely using a broker. Here’s the reason we recommend our clients steer clear of brokers: brokers aren’t held to as high a fiduciary standard.
In order to receive unbiased advice based on what is in your best interests, always choose an independent RIA, especially one who finds money managers or funds for you and does not offer proprietary funds (ones they own) or receive any compensation from a money manager. The only fee your advisor should be receiving is from you. It’s also important to remember that both you and your advisor need to be taking an active interest in your accounts. This means not just checking them at tax season or every five years, but monitoring the accounts and setting benchmarks to ensure that they are succeeding in the way you want and need them to.
For more information about succeeding with your finances, visit tswealth.com.
