Consolidation to One Trusted Financial Advisor

By
Shaun Peterson, Financial Advisor, RJFS

As you approach your retirement years you’ve likely had multiple investment accounts. IRA’s, 401K’s, TSPs, annuities, life insurance, and brokerage accounts just to name a few. Managing all of these accounts can be very confusing, especially if they are each held at a different institution with different advisors. Retirement is a big step and simplifying your financial picture by having an advisor who acts as your quarterback can help ease into the transition. Good advisors are going to need to assess all of your information before they can make a recommendation to you. Think of it like this, when you go to the doctor he or she is going to ask you a variety of questions so they can see the big picture before they diagnose you. The same is true when visiting with a financial advisor.

For some consolidation can seem like they are putting all of their eggs into one basket. They believe that they should keep multiple advisors or accounts to remain diversified. I can understand that line of thinking, but what if advisor “A” is investing the same as advisor “B”? Perhaps advisor “B” is recommending a different strategy that he or she wouldn’t if they knew how advisor “A” has the client invested. You can see how that could be very difficult to manage. Not to mention all of the different statements, 1099’s, account log-ins, RMD’s to fulfill etc. that the client is going to have to manage. Our belief is that if we are managing the client’s whole financial picture we can build him/her a financial plan and then properly diversify their investment portfolio. We will then better understand their goals, liquidity needs and expectations.

Limitations of a client’s current advisor may be a reason that consolidation hasn’t occurred. Some advisors can only offer certain products like annuities or life insurance. This prevents them from making any other recommendations than what their firm has to offer. Being an independent branch of Raymond James means we can recommend strategies that truly match up with an individual’s needs. We are able to utilize a variety of different tools and investment strategies such as individual equities, bonds, insurance, etc. to build a financial plan for our clients.

Forgotten accounts are another reason some haven’t consolidated. Examples of “forgotten accounts” can be old 401k’s from a previous employer, a brokerage account that may have been left at a firm after an advisor had moved on, an annuity that was purchased 10 years ago and hasn’t been reviewed since. This happens more often than you think. People become comfortable and don’t want to deal with these accounts for a variety of reasons. Many aren’t sure if the account value has increased, if it’s diversified or what the end goal for the account is. We are often helping people understand their options with these “forgotten” accounts.

Consolidation is important for a variety of reasons that I’ve mentioned: simplification, an understanding of the whole financial portfolio, proper diversification and constructing a financial plan just to name a few. When working with clients we make a strong recommendation that if they choose to move forward with us then we need to be their only advisor. We are then able to provide much better recommendations which in turn benefits our clients.

Opinions expressed are those of Shaun Peterson and are not necessarily those of RJFS or Raymond James. Be sure to consider all of your options and the applicable fees and features of each option before moving your investment and/or retirement assets.

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