Transcript Financial Advisors or Planners

Stock Market Analysis and
Personal Finance
Mr. Bernstein
Financial Advisors and Financial
Planners
November 2016
Stock Market Analysis
& Personal Finance
Mr. Bernstein
Financial Advisors and Planners
Advise clients on how best to save, invest, and
grow their money
May specialize in one aspect of clients’
financial lives, such as retirement or estate
planning, or may provide lifelong general
advice
May work in teams or as individuals
2
Stock Market Analysis
& Personal Finance
Mr. Bernstein
Financial Advisors and Planners
No longer “stockbrokers” but may have some expertise in
selecting securities, ETFs, mutual funds or other investment
vehicles
Should have strong ability to advise clients on appropriate
asset allocation and risk management practices for their
goals and life situation
Are usually not:
Accountants or tax advisors
Insurance agents
Mortgage brokers
…but often have some expertise or contacts in that area3
Stock Market Analysis
& Personal Finance
Mr. Bernstein
Financial Advisors and Planners
May be paid a commission when you purchase
products
May be fee-based – charge a percent of assets
regardless of activity or assets owned
Both methods of compensation have conflicts of
interest
In April 2017, new DOL rules will require financial
advisors to accept fiduciary responsibility
4
Stock Market Analysis
& Personal Finance
Mr. Bernstein
Financial Advisors and Planners
What is a RoboPlanner or RoboAdvisor?
An online wealth management service that provides
automated, algorithm-based portfolio management
advice without the use of human financial planners.
Costs are typically lower than with
human advisor.
5
Stock Market Analysis
& Personal Finance
Mr. Bernstein
Financial Advisors and Planners
Get started with an example of a RoboPlanner: www.wealthfront.com
• What are the stock funds they recommended? (click “See more details”)
• What percentage of your overall portfolio will be made up of stocks?
• What factors do you think led them to recommend this percentage in stocks
• What do you predict happens to their recommended stock and bond % as you
click “+” or “-” in the risk tolerance dial on the “See more details” page?
• Why do you think Natural Resources are included? Seems like a strange
investment.
• Why are they recommending primarily Vanguard funds?
• What are the fees associated with this strategy (see the Your Costs tab in the
“See more details” page)
• What is the probability that a portfolio like this would lose money over a five
year period (see Projected Performance chart in the “See more details” page)?
• What do you think are the pros/cons of using a Robo-advisor? Do you trust
their approach? Why or why not?
6
Stock Market Analysis
& Personal Finance
Mr. Bernstein
Financial Advisors and Planners
Help busy clients focus on non-financial
aspects of their lives
Help clients stay disciplined in their financial
management and avoid undue risks
7
Stock Market Analysis
& Personal Finance
Mr. Bernstein
Financial Advisors and Planners
“DB” (Defined Benefit) plan members will receive set
amount of money from their employers when they get
to retirement age
“DC” (Defined Contribution) plan members select
investment alternatives individually, and at retirement
the amount of money available is dependent on
investment performance over the years
Most corporations have discontinued DB plans
The large majority of Americans in high school today
will need to manage their own retirement assets…or…
8