Two years ago the most important concern investors had about financial advisors was their ethics. Could investors trust advisors to provide complete and accurate information that was free of any potential conflicts of interest? Major losses in 2008 and continuous headlines documenting scams and deceptive sales practices fueled their concerns.
Now, the biggest concern is the advisors’ ability to produce competitive performance for reasonable amounts of risk and expense. This new #1 concern is also not surprising. Four years after the 2008 stock market crash, investors are still trying to win back their losses. And, performance is their principal way of getting their assets back.
Investor Watchdog has introduced four new tools that will help investors answer the critical question, “Am I getting competitive returns for reasonable amounts of risk and expense?” The answer to this question may determine when investors retire, their standards of living during retirement, and their financial security late in life when they need it the most.
The first tool is five Performance Benchmarks that investors use to determine the quality of their returns. All they have to do is select the Benchmark that best fits their current situation and tolerance for risk. Investors should feel better if their advisors’ results exceed the benchmark’s return and concerned if their performance lags their benchmarks returns. This concern should increase if they under-perform their benchmark several quarters in a row.
The second tool is Performance Tracker that enables investors to develop a track record for their advisors’ results. Investors or advisors input performance into the tracking system, which compares their advisors’ results to investors’ Benchmark returns and produces a report that displays the over or under performance.
The third tool is Watchdog’s quarterly monitor service. Three of the 12 categories that are monitored are performance, risk exposure, and investment expenses. Each quarter Watchdog gathers data for the three most important characteristics that impact the performance of investor assets. Investors store this information in their free Watchdog User account.
The fourth tool is called Fact Finders. There are Fact Finders for performance, risk, expense, and other investment criteria that impact the performance of assets. Investors can use the Fact Finders at any time to obtain additional data that helps them make informed decisions. For example, they are considering terminating advisors, but want more information before making their final decisions.
One of the most important benefits of Watchdog’s free services for investors is documentation. Most investors are willing to accept verbal information from advisors. What they fail to realize is verbal information benefits advisors because there is no written record of what was said. This makes it easy to deny later. Experienced investors want documentation so they have a permanent record of what was communicated to them. If there are disputes, they have facts that support their claims. It is not their word against the advisors’. Watchdog provides the facts and the documentation that is stored in investors’ free User accounts.