- February 6, 2009
- Posted by: Brian Poncelet
- Category: Approved
There is a lot of talk about paying for an objective second opinion or third party to look at a portfolio to see if it is doing as well as it could in these difficult times, and whether it’s tailored to the client’s risk tolerance and retirement goals.
Second opinion (second opinions plural) from (Collins dictionary): if you ask another qualified person for their opinion about something, such as your health. For example, I would like to get a second opinion on my doctor’s diagnosis.
Here is a partial check list to determine whether you are indeed getting good value for your second opinion.
- Are there follow-up meetings every year after the first meeting after the plan has been delivered? Yes/No
- Do they charge for the new review with the advisor? Yes/No
- If a new plan has to be made six months or two years later because of death of a spouse or a job loss, will the change the plan or will they charge a new fee? Yes/No
- Do they review company benefits? (Disability plans etc.) Yes/No
- Do they review cash flow for transferred money that is going unnecessary or unknowingly to expenses like auto insurance, homeowners insurance, etc? Yes/No
- Can they show you how to save between $200 to $700 per year with the same or better coverage? Yes/No
- Do they review your mortgage can you pay it years faster by doing the above? Yes/No
- Review wills power of attorney? Yes/No
- Review life insurance coverage how they/you come up with the coverage? Yes/No
- Do they recommend primarily term insurance? Yes/No (an example of how term can be the wrong choice is children who are challenged physically or mentally and need life time coverage term is more expensive)
- If you are self-employed, do they review business risk management such as holding companies etc? Yes/No
- Do they review company benefits, how coverage can be modified for key employees such as critical illness insurance, etc. Yes/No
If you answered No to any one of the above questions, make sure you get a discount on the fees…and get another second opinion!
If the fee only company primary focuses on your portfolio and does not review “risk management” then you may consider joining an investors group and do your own investing yourself and save the fees. With an investors group you can learn about markets and what you may be comfortable with, but it takes time.
Risk management is usually not talked about because, let’s face it, it is more fun to talk about Scotia bank or Royal bank stock prices then is to talk about disability insurance short falls with company benefits!