On this episode of "On the Money" Ruedi Wealth advisors and Dr. Fred Giertz discuss important questions to ask a financial advisor and answer caller questions.
(2:00) Economy, Turkey, Tariffs
(11:11) Caller Question: Is the deficit going up, is it higher or lower as a % of GDP? Is the trade deficit going up? Is that a problem?
(21:45) 6 Questions to Ask a Financial Advisor
Read David Ruedi, CFP®, RICP®’s Investopedia article: 6 Questions to Ask a Financial Advisor
(22:30) Questions for a Financial Advisor: Are You a Fiduciary?
“Being a fiduciary means an advisor is required to put the client’s best interest first. There are other advisors out there who don’t follow the fiduciary standard, they follow the suitability standard. It sounds like a good idea, but it doesn’t have to be in your best interest by law.”
- Ryan Repko
(25:27) Questions for a Financial Advisor: How are You Compensated?
(26:00) Caller Question: Do you know of any resources to learn about social security claiming strategies?
"Ultimately, the best way to find out the optimal social security strategy is on the backdrop of your retirement plan, because what might look optimal in isolation, when you add it to your other income streams and your attitudes towards using principle… at the end of the day you’re not really going to know until you have a retirement plan with everything integrated."
- Paul A. Ruedi
(34:32) Questions for a Financial Advisor: What is your Investment Philosophy?
“I don’t think there is right or wrong necessarily. There are basically two camps, active and passive; ultimately you want to understand what investment management path your advisor is going to take because they can lead to very different types of results. The evidence is compelling that the vast majority of actively managed mutual funds underperform their benchmarks over long periods of time.”
- David Ruedi, CFP®, RICP®
(36:35) Questions for a Financial Advisor: How Will I Know I am on Track to Achieve my Goals?
“The financial plan tells us whether we are moving the ball forward, backward, or standing still.”
- Paul A. Ruedi
“There are still a lot of financial advisors that really only manage investment portfolios – they don’t have a financial plan guiding things. If that’s the case, you don’t know if you are on track to meet whatever goals you have.”
- David Ruedi, CFP®, RICP®
(40:32) Questions for a Financial Advisor: Do You hold any Designations?
“There are a lot of different credentials out there. There is the CFP®, CERTIFIED FINANCIAL PLANNERTM designation, which is a financial planning specific credential. There is also the CFA or chartered financial analyst which is a super deep dive on investments. The CPA – certified public accountant, is more of a tax-related credential. What you want to do is match up the expertise of your financial advisor with your particular needs.”
- David Ruedi, CFP®, RICP®
(44:15) Caller Question: What is your opinion on BDC’s (business development companies) and MLP’s (master limited partnerships)?