Common Mistakes in Financial Investment Advice & How to Avoid Them

Studies have shown that too many people are getting their financial investment advice from the wrong sources. So where can you go wrong? If you trust the wrong people to give you investment advice, then you may be going very, very wrong in your investments without knowing it. Here are some clues that your financial advisor may be steering you the wrong way.

Where You Can Go Wrong

If you currently own a mutual fund that has a B in its name, your financial advisor may be steering you in the wrong direction. B-share mutual funds are generally bad news and need to be avoided. One reason for this is because they tend to charge higher expenses assessed over the lifetime of the mutual fund investment.

If you are paying your financial advisor through commissions rather than through a flat rate, your best interest is not being taken seriously by your financial advisor. The flat rate pay structure is more likely to encourage your financial advisor to give the right advice rather than being motivated based purely on performance.

If your life insurance policy is a cash value policy only, then you are being steered in the wrong direction as well. The same is true for if you own a variable annuity that is wrapped inside of an IRA. These are investment options that are only going to benefit you if you understand how they work and use them properly in your investment portfolio.

Finally, if you are saving for the college education for your kids rather than for your own retirement, something is very wrong with your investment strategy and it is time for a change, and a new advisor. You cannot pass up investing for your own retirement for anything as there are no scholarships for retirement.