A lot of people ask me the question, “What is a holistic advice?”
The term is referring to comprehensive advice that is big picture in nature. There are a ton of different places competing for a consumer’s investment, insurance and financial services business. The problem with most, in my humble opinion, is that they are offering only a specific product or service.
Why does this pose a problem to your finances? The reason it presents a potential for problems is when one is looking at a mutual fund, annuity, life insurance, stock, bond or any other place to park money without considering the impact on other holdings; the overall plan is at risk.
What is interesting is if you are being pursued to invest by a mutual fund company, annuity rep, or stockbroker, in my experience, you are going to receive very shortsighted information. Each is convinced his advice or vehicle to be superior to all others and kind of a one-size-fits-all. An example would be someone with millions of dollars being advised by a mutual fund representative to invest in mutual funds as the place to park money.
Mutual funds are typically for smaller investors who do not have the funds to go direct to the money managers. This would be an error to suggest the funds and would cost the client in terms of higher costs and lack of access to broader range of options his higher net worth affords. Call any large mutual fund company, though, and you will not hear this information. They are one-trick ponies.
Many financial advisors locally hold seminars at restaurants. Heck, from time to time, we even do learning events such as these. I would venture to guess, of all the firms doing them, more than 90 percent of these are really annuity salesman posing as full-fledged financial advisors. Don’t get me wrong. Annuities have become a great financial tool. However, should every nickel be poured into an annuity? Further, does a person who only has an insurance license have the expertise to advise someone on all areas of finances?
So, what is the purpose of this article? To make you aware that to make educated decisions about your money, the first place to start is to seek out advisors who have broad knowledge and proper licensing to review your entire financial picture. If you work with a stockbroker who does not have an insurance license, this person’s big picture advice will be limited and even could be tainted with misinformation and vice versa.
How do you find out what licenses your representative holds? You can ask him, or you can check out Arizona Department of Insurance, Financial Industry Regulatory Authority and the Securities and Exchange Commission Web sites to check on licenses and/or any disciplinary action.
John P. Duncan is President/Founder of Gold Leaf Advisory, a comprehensive wealth management firm located in Mesa. He is an author, speaker and sought-after expert in retirement planning and implementation. His practice is designed to provide objective advice to individuals and businesses with net worth above $1 million. For more information, send an e-mail to info@goldleafadvisory.com.