Should You Replace Your Financial Adviser In 2016?



By Jack Waymire

You may get a wake-up call when you review your 2015 investment performance numbers. You may even conclude that your financial adviser is not the investment genius you thought he or she was.

That’s because you may have given your adviser credit for the fine performance of your investments during bull markets.

Six years of positive returns came to a halt in 2015, however, when the stock market produced its first negative return since 2008. The S&P 500, a proxy for the performance of the stock market, was down a nominal 0.7%. This small loss includes dividends, but does not reflect the deduction of any investment expenses.

That nominal loss is not a big deal by itself. But deduct typical expenses from the S&P 500 return and the net return could have been a negative 2% or 3%.

Time to Find a New Adviser?

If your assets declined 5% (or even 10%) after all expenses have been deducted and you expected to match or beat the performance of the market by losing less or making more than the average, now that is a very big deal.

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