Do not be a passive investor, actively engage

by - August 30, 2016

I can’t tell you how many times I’ve had people say to me:  “I’m not really sure what I’m invested in”!

I was once of those until I got a wake up call from a former colleague. It was just after the Bernard Madoff scandal, where thousands of investors lost their money. She and I were talking about how some of these financial companies are taking advantage of their clients.

She then shared with me how her own financial advisor didn't speak to her accept if there are changes that need to be done, which really happens once in a blue moon. She said her investment was not really moving forward.

Later on I realised how wrong she was. Here she was talking about how other people were duped from their money and yet she choose to do nothing to sort out her own issues with her advisor.

And yes, the financial advisor must be proactive and talk to her periodically and let her know what's happening with her money. But, she still needs to take the initiative to call and sort out the issues instead of living it to chance.

Given the ever changing economic landscape and more complex, diverse and widespread financial products, it is prudent to keep in touch with your financial advisor at least once a quarter.

Most of us let our advisor take the reins because we don’t understand financial matters. But the only way to learn about your investment is to ask questions. Talking to them often would give you an opportunity to vet their strategy and methods so that you don't lose.

And if your advisor is not engaging you enough and not communicating every move they make with your money, then you have to let them go.

This communication with your advisor can be a call, an e-mail, text or meeting. It is also important to have a face-to-face meeting at least once a year. During these meetings, your financial advisor should answer any questions you have until you feel comfortable and understand how the investments will help you reach your goals.

Do not be a passive investor…actively engage.

Remember, it is your job to diligently review your advisor's activity to make sure things are being done in accordance with the plan that was put forward in the beginning.

And creating wealth doesn't just happen. It takes time and diligence. If you have been neglecting your financial responsibilities, it's now time to take back control of your money and never let go again.

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