Question: You can make your risk tolerance and goals known to advisers and they still try to prod you into riskier investments. Why? And if you deal with a CFP are you less likely to get bad advice or be taken advantage of? Is it safe to be in the market at all given the shape of our economy? Bonds aren’t safe, neither are stocks. How do you protect money in this environment? Intrafi network deposits?

Answer: You have a few questions here, so let’s tackle them one by one.

Why do certain advisers prod you into risky investments even when you’re risk averse?

One reason may be that the adviser doesn’t not know or understand your risk tolerance or goals. Have you clearly articulated them to the adviser? If so, and they’re still making questionable decisions for you, it may be time to head for the hills. (Looking for a new financial adviser? This free tool can match you to an adviser who may meet your needs.)

“Your investments should align with your risk capacity, which is what you can afford to invest; risk tolerance, which is how you feel about taking risk; and your other financial goals. If your adviser doesn’t understand these things or isn’t adhering to them, I’d recommend a second opinion or new relationship,” says certified financial planner Josh Trubow at Sensible Financial Planning.

Have an issue with your financial adviser or looking for a new one? Email questions or concerns to [email protected].

Another reason may be that their intentions are in the wrong place. Some financial advisers are fee-only planners, which means they are only paid by the client, whereas fee-based planners may receive commissions based on products they sell. That can mean a fee-based planner recommends something that isn’t the best option for you, even if it’s a suitable one.

Regardless of compensation model or adviser, you should fully understand what you’re investing in and why. If it doesn’t match your goals, risk capacity and risk tolerance, ask the adviser why, and always know that you can take your business elsewhere.

Will a CFP be less likely to give you bad advice or take advantage of you?

There’s no guarantee of good advice, not even with a certified financial planner.  But CFPs can be a good bet. In addition to undergoing extensive training, passing a qualifying exam, and meeting experience requirements, CFPS are required to act as fiduciaries, which means they must act in their client’s best interest, regardless of any incentives . 

While CFPs take a fiduciary pledge to act in the best interest of their clients, it can be harder to do when they also work for a company that sells its own products. “The best way to distinguish this on the CFP website is to look for fee-only planners, not fee-based planners. Finding a CFP who is also a member of such organizations as NAPFA, XYPN or FeeOnly Network is more likely to ensure you end up with an adviser who has fewer ties to specific products,” says certified financial planner Andrea Clark at The Table Financial Planning. (Looking for a new financial adviser? This free tool can match you to an adviser who may meet your needs.)

Know this too: “If a CFP misbehaves, they can lose their credential,” says certified financial planner Robert Persichitte at Delagify Financial.

Regardless of designation, it’s important to do your due diligence when choosing a CFP. “Consider their experience and reputation and don’t be afraid to seek a second opinion from another trusted planner. Most importantly, the financial planner should be held to a fiduciary standard which means they’re legally obligated to act in your best interest,” says Ryan Haiss, certified financial planner at Flynn Zito Capital Management. 

Is it safe to be in the market now?

You’re correct in saying there are some concerns with the shape of the economy and the potential of a recession. And investing in stocks isn’t 100% safe by any means, but it is likely necessary to meet long-term goals. “Annual returns from the S&P 500 were positive in 32 of 43 years from 1980 to 2022. During that time, the average annual return was 8.7% — and even though there were recessions during those 43 years, the stock market prevailed,” says Haiss.

The way you may feel about the market today and the kind of portfolio needed to meet your long-term goals may not always align. Bacon suggests sticking to the long-term investment plan you created with your adviser and making changes based on circumstances, not market events. “Staying invested in good markets and bad is par for the course,”  says certified financial planner Matt Bacon at Carmichael Hill & Associates. 

He continues: “You can always fire your adviser and put your money in FDIC-insured accounts to prevent loss, but research shows that you don’t have a good shot at calling the market bottom. You’re likely to miss out on days with big upside and that matters. You will have already missed the boat by the time it feels safe to jump back in.” 

How do you protect your money in this environment? 

For a shorter investment time horizon, say zero to three years, CDs and money markets can absolutely make sense — and typically are among the safest ways to invest your money while also earning a solid return, pros say.

“Anything longer than that you face the risk of losing purchasing power to inflation over time. It’s best to work with a professional that can assess your goals and risk tolerance,” says Haiss. (Looking for a new financial adviser? This free tool can match you to an adviser who may meet your needs.)

From there, the professional can recommend a diversified portfolio and can help hold you accountable during turbulent times. “While a diversified portfolio won’t protect against principal loss and carries risk, it may help smooth out the ride,” says Haiss. 

You also mention IntraFi network deposits (a way to safeguard deposits over $250,000 by spreading them across multiple accounts to ensure FDIC protection), which are one approach to safe investing, but they may not keep up with inflation. “TIPS (Treasury Inflation Protected Securities) or I-Bonds might help preserve purchasing power of your investments,” says certified financial planner Josh Trubow at Sensible Financial Planning.

Have an issue with your financial adviser or looking for a new one? Email questions or concerns to [email protected].

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