Tags: Clements | financial | insurance | tax

WSJ's Clements: Don't Overlook Big Gaps in Your Financial Plan

By    |   Tuesday, 07 April 2015 07:20 AM

Wall Street Journal columnist Jonathan Clements is worried that Americans are overlooking major financial issues while they focus on smaller ones.

"Today, many folks are well aware of the slow erosion caused by high fund expenses, hefty advisory fees and big investment-related tax bills, as evidenced by the growing enthusiasm for exchange-traded funds, robo advisers and tax-loss harvesting," he writes.

"My fear: while investors are focusing on these relatively modest drags on their annual investment returns, they may be overlooking big gaps in their financial plan that could quickly destroy the savings they have accumulated."

And what are the big issues to which we're devoting too little attention?

"Failing to buy life, health and disability insurance," Clements says. "Holding a badly diversified investment portfolio, wagering on one or two heavily mortgaged rental properties or betting big on stocks when you don't really have the stomach for it."

That's a pretty big list. So unless you have a lot of time to devote to all these issues — the small as well as the big — you might want to consider hiring a financial adviser.

Many of us are reluctant to hire financial help, of course, either feeling we should do be able to do it ourselves or we're repelled by the horror stories of unethical advisers.

"Admitting that you need help is hard. There is shame in having gotten money wrong so far, or shame that you can't figure it out or shame that it's taken so long to start," writes New York Times columnist Ron Lieber.

As for the rip-off artists in the financial advisory industry, "Woe to us and our profession that we've made it so hard," Michael Kitces, co-founder of XY Planning Network, a financial planners network, told Lieber. "Our standards are so low that we've brought this upon ourselves."

Fees are an issue too. So if you decide to go the financial advisor route, take time to ensure your choosing a good one.

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Wall Street Journal columnist Jonathan Clements is worried that Americans are overlooking major financial issues while they focus on smaller ones.
Clements, financial, insurance, tax
326
2015-20-07
Tuesday, 07 April 2015 07:20 AM
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