Free Portfolio Reviews

Is a Free Portfolio Review Really Free?

How to work with a financial planner

By Debra L. Karplus

     You’re a conscientious person.  You take excellent care of your home, car and personal belongings.  You visit the doctor and dentist regularly for exams, even when you’re healthy, to make sure everything’s okay.  A friend mentioned that you should also have your nest egg checked periodically, by having a financial checkup.  You’ve spotted the marquee at your bank or the notice in the local newspaper advertising a free portfolio review.  You’re happy with your bank and trust the people who work there.  But, you pride yourself in being a good consumer and know that nothing’s ever really free.  There’s always a hidden agenda; you always need to read the fine print.  So what’s the real deal on these free portfolio reviews?

Free portfolio places are done by various financial institutions.

     Many bank, credit unions, other financial institutions, independent companies, and possibly your online brokerage firm, often perform free portfolio and retirement reviews for current and potential customers.  Their logic is that enough of these people will ultimately become their customers, so their time’s well spent; it’s really free because they hope to get your business. Typically they do get enough business to “give away’ the portfolio review service. Before you make an appointment, make sure it’s really free.

Professionals with different background, training and credentials can do portfolio reviews?

     A Certified Financial Planner (CFP) is likely to be the expert doing your review.  They are professionals with special college training who’ve passed a certification exam.  But, you might encounter someone with different training, schooling and certificate, such as a Personal Financial Specialist (PFS), a Certified Public Accountant (CPA) who’s received specialized training in financial planning.  Or you may be working with a Certified Retirement Planning Consultant (CRPC ) who specializes in retirement planning.

Being well-prepared gives you the most value from you free portfolio review?

     One you’ve scheduled your appointment, you’ll need to gather current relevant financial documents from home.  This helps maximize the benefit of the review. Bring bank and other statements from non-retirement investments.  Provide retirement documents including your IRA, ROTH, SEP, 401K or 403B and other pensions such as state retirement or teacher retirement system.  Don’t forget that yearly statement you receive from the Social Security Administration which states what benefits you’ll get at different retirement ages.  A capable financial planner should also as about your current income, living expenses, and debts including mortgage, car payments credit card and other financial obligations.  They need to know your current age and desired age at retirement and how you expect to live in retirement such as relocating or travelling.

 

Some professionals are better than others.  Find one who seems to be in sync with you.

     Beyond credentials, the person you meet with should seem professional, competent, and not pushy.  One couple recently complained about the CRPC they met with.  “She talked more about herself and her own family and her retirement plans; she didn’t really seem to care about us.”  Another woman expressed concern about confidentiality and privacy, after a planner led her into an open area with other planners and their customers.  One customer, referred by a friend to an individual for his portfolio review, was shocked when the “professional” talked about his friend’s investments.  If you get a bad gut feeling, are treated condescendingly or without respect, then end the meeting quickly and exit quietly.

     Whatever credentials, the person doing your portfolio review must be thorough.  A semi-retired teacher, with net worth nearing a million dollars, arrived to meet her portfolio reviewer, without first changing out of her gardening clothes.  The planner didn’t take time to even ask pertinent questions about her retirement savings, apparently making some wrong assumptions, based on the woman’s appearance.   The lesson in life, for everyone, is that sometimes you don’t really know who you’re talking to!

  After your portfolio review is completed, you have some options.

     Following your portfolio review, you should receive a packet in the mail with computerized charts of how your assets specific are allocated, and possibly some suggestions to rebalance.  Some of these are more comprehensive, but, don’t fret.  Remember, it’s free.

     You may want to follow some of their suggestions on your own. Or, if you don’t feel confident making you r own investing decisions, you may want to hire this financial expert, or engage some other qualified professional.  Some of the experts in the financial world are fee-based, and others charge a commission on what they sell.  Watch out for the commission-based planners.  They make more money selling certain investments, regardless of what’s best for you.

     A free portfolio review is a great idea to assess how you get from where you are, to where you want to be financially.  Ask trusted friends for recommendations of specific names or financial institutions.  Then go with your intuition to determine the next step.