See my website's PowerPoint (under the 9 Simple Steps Logo) slide #10 that includes my 9 risks to financial planning. But here are three more:
(1) Sequence Risk (Reference: Harris; Journal of Financial Planning, Sept. 2009) - withdrawing too much or too little as a result of the sequence of returns that hit you, personally, just before you start retirement. You may be overspending or underspending based on your investment returns and the rate of your withdrawals. 4% may be too little - affecting your lifestyle - or too much - affecting your future wealth. Time to see a financial planner to help explain the sequence of secular bear and bull markets and what it may mean to you.
(2) Media Risk (Reference: Joni Youngwirth; Practice Management Solutions, Sep-Oct 2009) - the risk that clients will overreact to what they hear in the media and, worse, that your adviser may not be immune to this risk either. (I love this as I have blogged much about media hype).
(3) Quant Risk (Reference: Solow; Journal of Financial Planning, Sep. 2009) - not fully understanding the complexities of computer models (like Monte Carlo, for example, and an advisor's color, glossy charts) that are fraught with human misunderstandings and errors in judgment. Investors yearn for a quantitative analysis that can make investing easy but it does not exist in this complicated, uncertain climate and huge economic system that has too many variables.
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.