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    Fiduciary Financial Planner- The True Value Of Great Advice

    Fiduciary Financial Planner

    What is the true value of working with a Fiduciary Financial Planner?

    Fiduciary Financial Planner Los Angeles weighs in.

    Why seeking ­– and heeding – financial advice from a Fiduciary Certified Financial Planner may prove beneficial, some might even say priceless. Beyond a Fiduciary, you should also look for a Financial Advisor who offers expert tax-planning advice. 

    By David Rae Certified Financial Planner™, Accredited Investment Fiduciary™

    Fiduciary Rule Update 2024

    Update 12/5/2024: With the election of Donald Trump (again), implementation of the Fiduciary Rule is expected to be delayed again. Likewise, I would be surprised if regulations protecting investors from unscrupulous financial advisors are watered down again in the second Trump term. 

    You don’t have to be Einstein to see the True Value of a Fiduciary Financial Planner.

    Time to face facts:  You can’t control what the stock market does day to day or even year over year. However, what you can control as an investor is your financial attitude and behavior.  One simple way to improve your fiscal behavior is to work with a qualified fiduciary financial planner.  With improved fiscal behavior, an investor is less likely to make the types of financial mistakes many people make that can sabotage their financial success.

    Why is this? Well, basically, it’s because a lot of the smartest choices may feel counter-intuitive to an inexperienced or uninformed investor.  A good fiduciary financial advisor, on the other hand, has been around the block a few times and is able to play the long game without getting his or her head turned by returns that seem (and are) too good to be true. A prime example of this is many people feel that regularly beating the stock market is necessary to reach their financial goals. In fact, those of us in the independent fiduciary investment advice business know that this isn’t necessarily true.

    Progressive Financial Planner LA on ABC 7 News talking about the Fiduciary Rule for financial advisors. 

    The S & P Return Gap

    The prestigious financial research firm Dalbar releases a study every year called Quantitative Analysis of Investor Behavior that’s better known as just the Dalbar Study.  According to their findings, from 1984 to 2013, the S&P 500 had an average of 11.11% per year in return. It sounds like great investment returns great, right?  Unfortunately, the downside is the average S&P 500 investor earned just 3.69% over the same period of time.*

    The truth is that very few people even come close to matching the S&P 500 returns over the long run unless their name happens to be Warren Buffett and they live in Omaha. Through the years, I’ve seen tons of people who say they only invest in an S&P fund, only to manage dragging down their returns to a much lower level than their holdings for a given period of time.  Whatever “strategy” they were implementing (if any) caused them to underperform their very own investments.

    Getting great guidance from a financial planner in Los Angeles can help you make smart investments and financial choices over time. Vanguard has estimated the value of this financial advice to be over 3% per year; I will let you assign a value to peace of mind we can help you achieve.

    Top Financial Advisor Los Angeles David Rae

     

     

     

     

     

     

     

    Case Study Priorities from a Fiduciary Financial Planner

    Let’s look at it another way. What is more important to you?

    1. A) Short-term bragging rights: What is the numerical return on your portfolio?
    2. B) Long-term financial security: Do you have enough money to reach your goals?

    CASE STUDY A- Fiduciary Financial Advice

    • I recently met with a day trader, “Genius Bob,” who bragged about the “amazing returns” he’d achieved. His wife (who initiated the meeting) quickly informed me of “Genius Bob’s” selective memory about the figures.  While it was true he had doubled his money over the past 87 days (impressive), it was also true that over the past two years of full-time DYI day trading, he’s lost about 75% of his family’s life savings (NOT Impressive, not to mention the lack of any other income from elsewhere.)  OUCH!

    CASE STUDY B- Fiduciary Advice

    • In 1984, twin sisters Sam and Pat both started out with $100,000 to invest. Sam worked with an average financial advisor, who just really didn’t offer much guidance beyond picking the initial investments. Sam got average returns of 3.69% per year, and her account grew to $286,000 by 2013.  Not too shabby, considering she nearly almost tripled her money.  She was pretty smug about how well she’d done until she looked at her sister Pat’s account.  In contrast, Pat had professional fiduciary financial planner help, which proactively helped her avoid many of the investing mistakes and behaviors that drove down Sam’s returns. In doing so, she earned a respectable 8% return per year on average. Growing her account to about $931,000, more than triple her sister Sam’s profits.

    Of course, these are just examples used for illustration and are not specifically indicative of any particular investment or situation. That being said, actual results will vary.   While most of us probably fall somewhere between ‘Genius Bob” Sam or Pat when it comes to our investing behaviors, we all can improve how we handle our finances.    The bottom line is that by avoiding big investing mistakes and letting compound interest work its magic, even with a return well below S&P averages, you can potentially achieve great results. A fiduciary financial planner should be able to help you avoid most of these big investing mistakes.

    Related: Inherited IRA Mistakes to Avoid

    Time to Get Real with a Fiduciary Financial Planner

    By no means am I generalizing what type of return an individual or couple’s portfolio should be delivering.  The point is to develop a financial plan (including investments) that fits your specific needs and goals.

    For instance, you may find that with your current assets and saving rates, you need to save 200% of your income.  In that case, you may need to reduce your retirement expectations or expect to work longer. On the other hand, you may run the numbers and see that you’ll be fine with a much more modest return than you’d been investing for. If this is the case, you can potentially lower your overall portfolio risk.

     

    The Smart Money is on a Fiduciary Financial Planner

    I believe the real value of working with a fiduciary financial life planner goes well beyond investment returns.  Juggling all your financial puzzle pieces can be stressful and time-consuming. Having a trusted Financial Planner to help you with all of this can be a huge weight off your shoulders. I’ll save the conversation about couples and fighting over money for another time. But if you haven’t heard couples often fight over money, you have no idea how gruesome this can be, trust me.

    I’m in pretty good shape physically, but I do more reps and work out harder when I have a knowledgeable training partner. Which in turn leads to me getting in better shape.  I’m not any smarter or doing any new or special workouts, but the guidance I get from an experienced trainer leads to significantly greater success than if I were to work out alone.  The same may apply to having a financial coach, aka a Certified Financial Planner™, who can develop appropriate strategies – and encourage constructive fiscal behavior to boot – to make your money work harder in pursuit of your long-term goals.

    Live for today. Plan for tomorrow with the help of a Fiduciary Financial Adviser in LA.

    You may also enjoy:

    Fiduciary Financial Advice: Does it Really Matter? Why Yes, it Does!

     

    Fiduciary Financial Planner LA David Rae
    Fiduciary Financial Planner LA David Rae

    DAVID RAE, CFP®, AIF® is a Los Angeles- retirement planning specialist with DRM Wealth Management. He has been helping people reach their financial goals for over a decade. He is a contributor to Forbes.com. Has also written for the Advocate, Investopedia and Huffington Post.  Follow him on Twitter @davidraecfp on Facebook or   www.davidraefp.com.

    David Rae is regularly quoted in the media.
    Best Financial Planner LA David Rae has appeared in Kiplinger, Los Angeles Times and Investment News to Name a Few.

    For more great Los Angeles Fiduciary Financial Advice.

    6 Reasons to Only Take Fiduciary Financial Planning Advice

    *Source Dalbar Study Quantitative Analysis of Investor Behavior 2014 This study utilizes data from the Investment Company Institute and Standard & Poor’s to compare investor behavior with the returns of the overall equity market. The Average Equity Fund investor represents the aggregate action of all investors in equity mutual funds. Investor returns are determined using the change in total equity fund assets after excluding sales, redemptions and exchanges. This method of calculation captures realized and unrealized capital gains, dividends, interest, trading costs, sales charges, fees, expenses, and any other costs.  The S&P500 Index is an unmanaged index of large-cap U.S. stocks. The index is considered to be representative of the U.S. equity market.  “Fiduciary Financial Planner- The True Value” Copyright 2021. 

    Connect With David Rae, Financial Planner LA

    David Rae, CFP® AIF®

    President / Founder DRM Wealth Management LLC

    1(323) 905-4380

    david.rae@financialplannerla.com

    "Fiduciary Financial Planner- The True Value Of Great Advice"

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