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What Can I Expect from My Financial Advisor?

There’s a common thought attributed to Warren Buffett on financial planning: “Our favorite holding period is forever," he says, explaining that if you can’t own a stock for 10 years, you shouldn’t do so for 10 minutes. But not everyone has the wealth or financial planning needs of Warren Buffett - and so what works for him might not work for you. It’s crucial to remember that everyone’s portfolio is different… but often investors need reminding of that fact. While financial planners can and should work with clients’ needs in mind, there are certain aspects of the job that are out of their control. Here are a few examples of what your financial planner can - and cannot - do. 

High return, low risk investments

In a very volatile market like the one we’ve seen this year, it makes sense that investors would be looking for the most financial stability available to them. What might not be possible, however, is to expect high returns from low risk investments. Low risk investments have the potential for long-term stability, but that doesn’t mean you’ll reap the monetary gains you’re seeking. There are always factors to consider, and it’s important to remember that nothing is guaranteed.

Giving tax advice without looking at a tax return

Your financial advisor cannot give you tax advice without first delving into your actual tax returns. Doing so could result in some potentially poor tax advice, leading to problems for you as the investor - and possibly for the advisor themselves.

Investing to the extreme

You may have heard that penny stocks can get you a high return on investment, which sounds like a dream, right? Your financial advisor will likely steer you away from them, and here’s why. In concept, penny stocks can fluctuate in a short period of time, leaving you to gain more than you invested fairly quickly. But in reality, penny stocks simply don’t work as a get-rich-quick tactic, and you may lose more money than you intended.

Expecting to have the same spending lifestyle in retirement

Your financial advisor will discuss any retirement planning concerns that you have, but the expectation shouldn’t be that you can enjoy the same type of lifestyle you had while you were in the workforce. Thorough planning for your retirement will make things easier. However, you’re simply not receiving the same amount of income each month as you were when you were working, and certain costs of living are higher as you get older. You’ll need to adjust your spending habits accordingly to enjoy all the benefits of retirement.

We’re here to help

If you need assistance in any stage of financial planning, Chatterton & Associates is here to help. We understand that everyone’s financial circumstances are different and we will work with you to find the best solutions for your situation. Contact us for a complimentary proactive financial review today.


The Team at Chatterton & Associates

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss. Past performance is no guarantee of future results. Please note that individual situations can vary. Therefore, the information presented here should only be relied upon when coordinated with individual professional advice.

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