DeepSummary
In this episode, Robert Croak and Austin Hankwitz discuss three reasons why listeners should be cautious when choosing a financial advisor. Firstly, they explain the common fee structures used by financial advisors, such as the percentage of assets under management, and highlight the importance of understanding the fees involved. They also differentiate between fiduciary and non-fiduciary advisors and their respective obligations.
Secondly, they warn against bad financial products that advisors may recommend, such as underperforming mutual funds and target-date funds with high expense ratios. They emphasize the need for clients to monitor their accounts' performance and the fees they are paying, as these can significantly impact their investment returns.
Lastly, they stress the importance of active management and engagement with one's financial advisor. They suggest considering fee-only advisors for those seeking more frequent guidance and planning, as opposed to advisors who offer minimal contact or attention.
Key Episodes Takeaways
- Understand the fee structure of your financial advisor and be aware of the potential for high fees.
- Beware of advisors recommending underperforming financial products, such as mutual funds and target-date funds with high expense ratios.
- Ensure active management and engagement from your financial advisor, and consider fee-only advisors for more frequent guidance and planning.
- Differentiate between fiduciary and non-fiduciary advisors, and understand their respective obligations and potential conflicts of interest.
- Monitor your account's performance and question any underperforming investments or fees that seem excessive.
- Seek advisors who prioritize your financial goals and provide tailored advice, rather than those who may be driven by commissions or sales incentives.
- Consider alternative investment options, such as low-cost ETFs, and educate yourself on investment strategies to make informed decisions.
- Evaluate your financial situation and goals regularly, and adjust your investment strategy and advisor relationship as needed.
Top Episodes Quotes
- “So if you're someone who wants to talk to an advisor, like, all the time, if that's weekly, bi weekly, monthly, quarterly, like, whatever, like, that's great, but you're gonna have to pay for it.“ by Austin Hankwitz
- “If they're a non fiduciary, they have every right to put you in some of these financial products that they want, including the ones that they may get the highest commissions on.“ by Robert Croak
- “And again, this account was filled with so many underperforming bond funds and mutual funds and target date funds, and it just didn't make any sense.“ by Robert Croak
- “My perspective is this, you kind of have a few options here. The HELOC is a good one because you could pull some equity out of your home, pay off that high interest debt, have that positive arbitrage in your favor.“ by Robert Croak
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Episode Information
Rich Habits Podcast
Austin Hankwitz and Robert Croak
4/15/24
In this episode of the Rich Habits Podcast, Robert Croak and Austin Hankwitz share their three most important avoidances as it relates to finding and choosing a financial advisor in 2024.
- High fee structure
- Bad financial products
- Lack of guidance and planning
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