Report Card Time – Part II (Questions to Ask Your Broker

It is that time of the year to review your 2013 performance, give tips on how to assess your results and questions to ask your financial professionals when auditing your account.

If investors do not know how their securities are performing compared to the market then they have a problem. Is this you? If your portfolio is managed by a broker or financial advisor, then you should have already had a call to schedule your 2013 review and 2014 outlook.

Review the following questions. If your broker has covered these topics, I applaud their efforts. If they have problems with these questions or you cannot get the facts, have patience and give them a chance to find your answers. Here are fair questions to ask during your account review.

What is your market outlook for 2014?

What is your opinion when comparing mutual funds vs. ETFs?

What is the total performance of my account; and each position since we began; and for 2013? How did my 2013 performance compare to the market, S&P 500?

What fees did/do you receive from my investments/trades, commissions, 12b-1 fees, etc.? Do you or your firm receive revenue sharing from my mutual funds?

What are my ongoing expenses/fees for 2014?

What is my downside protection strategy if we have another major sell off?

Be sure and note the tone and feedback when asking these important questions. Please keep in mind many brokers are hardworking Americans, working in a very difficult environment. These are fair questions that few investors ask, but should. Remember, it is your money and not theirs. Sometimes this gets lost in the shuffle.

One last question, if you are not at least matching the return of the market, “Why should I continue to invest with you?” Give your financial professional the same degree of professionalism and courtesy that you would expect to be given.

Professional brokers will have covered these areas when they suggested the securities you purchased while working with your asset allocation. They will have no problems answering these questions.

Conversely, many brokers would love to have better-educated clients. To help with this process, I created a document titled, “Fair questions to ask your financial advisor or broker”. It is available free-simply email me at my address below for your copy. This document is designed so you can have it front and center for your next broker/financial adviser visit.

Next week, I will audit the overall market performance to help you compare your returns with the market. Plus, compare the results of the largest specialty mutual funds with the largest index ETFs — the results will get your attention!

Plan your work, work your plan and learn to share your harvest!

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