Global View Investment Blog

Financial Self-Defense

When life gives you lemons … rely on the financial self-defense tactics you have built into your comprehensive financial plan to pull you through.

Yes, there are steps you can take to help protect your finances and your long-term goals, regardless of what’s happening in the world. Markets dip. Then they rebound. In volatile markets, it may feel like the deck is stacked against you, which is why every comprehensive financial planning checklist should include some kind of financial self-defense.

While preparing for life’s “what ifs” won’t prevent certain events from happening, the following financial self-defense strategies can save you time, money and stress later on.


The Right Financial Advisor

Many people assume that all financial advisors are the same. But that’s not the case. And making the right choice is the best financial self-defense move you can make. A financial advisor can determine when you can retire, how you can live in retirement and what you’re able to leave behind when you’re gone. You work hard for your money. Don’t give it away to a bad financial advisor. (Read our recent blog post: 5 Signs You May Be Working With the Wrong Financial Advisor.)

When looking for a financial advisor to work with, there are important questions to ask and important red flags to watch for.

For example, is your financial advisor an independent, fee-only, fiduciary?

The two most common types of financial organizations you will encounter are captive and independent firms. Captive brokerage firms are affiliated with a specific mutual fund or insurance company. This means that they are limited to offering products specific to the company they are affiliated with. So, what happens if they don’t have a product that best fits your financial growth needs? Typically, they’ll just choose a product that they can offer that is closest to your needs. It may not sound very strategic nor comforting, and it’s not.

An independent advisory firm like Global View is not run by a parent company and therefore, is not limited to the type of products they can offer. There’s no board of directors to report to and no quotas to meet.

It’s also important to understand how a financial advisor is compensated.

Global View is a fee-only fiduciary financial advisory firm, which means we have a legal responsibility to put our clients’ best interests first, always, and we do not receive incentives from outside companies. We are only paid by our clients, removing even the perception of a conflict of interest. This allows us to choose the best investment vehicles that are tailored to our clients’ financial goals.

Not all firms operate like this.


Schedule a free, no-obligation conversation with the financial advisors at Global View to see how we can help.


The Proper Risk Tolerance

Having the right risk tolerance built into your financial plan is crucial – and it should involve more than a simple, 5-question test you find online.

Determining just how much risk we can handle in our financial lives should be an in-depth and detailed process. Many investors think they have a high risk tolerance, because they like to take risks in their everyday lives, but the level we’re comfortable with when it comes to our money is often different. While it may be exciting to jump out of an airplane with a parachute, would you want your hard-earned nest egg to do the same?

In comprehensive financial planning, risk tolerance is the amount of personal and financial risk that you are willing to expose yourself to. The higher your risk tolerance, usually, the more aggressive your investment strategy. Lower risk portfolios, on the other hand, focus on capital preservation. These tend to be more conservative with steady and predictable portfolio growth. However, while a low-risk portfolio typically sees minimal losses overtime, if any, the gains can also be minimal.

It’s wise to review your risk tolerance as life unfolds. Your financial goals may change when you get married, have children or buy your first house. Your financial situation may have changed if you started a new job. You will have less time to recover any losses you experience as you get closer to retirement.


Full-Service, Family Office-Style Services

Another smart financial self-defense strategy is to work with a full-service financial advisory firm that can help you in many areas of your financial life, not just financial planning. When all of your needs are being addressed under one roof, there’s less of a chance that something will be overlooked. Your financial team has a better understanding of your entire financial picture – your estate plan, your taxes and your retirement plan.

Global View is one of just a few full-service financial advisory firms that offer family office-style services in the Carolinas. For more on what this looks like, read our recent blog post: Family Office-Style Services Aren’t Just for the Royals Anymore.


Stress-Testing Your Plans

Comprehensive financial planning should help you plan for the best, but prepare for the worse. Understanding what could happen in certain situations can better prepare you for that outcome should it happen. Stress-testing your financial plans can help you determine your risk tolerance and help you identify issues in your financial plan early on.

How will a volatile market effect your retirement plans? Your estate plan? Your taxes? Knowing what you can expect can help you remain calm in unsettling times and stay focused on your long-term goals.


The Bottom Line

You work hard for your money, but your money should work even harder for you! 

Taking a little extra time to incorporate financial self-defense into your comprehensive financial planning can be a game-changer. Research financial advisory firms and the products they offer. Identify your true risk tolerance and establish your comprehensive financial planning goals. A little financial self-defense can go a long way.

If you’re not sure how to get started or you’re ready for a second opinion, contact us. We offer a complimentary, no-strings-attached initial conversation to see if we’re a good fit. It’s never too soon to start planning for the future, so get the conversation started.

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Adam Wiles

Written by Adam Wiles

Adam is a Partner at Global View. Adam’s primary focus is on investment strategy, retirement planning, risk management, and new client identification. He has extensive experience and training in identifying client’s needs and explaining the solutions that meet those needs. He worked with Merrill Lynch for 2 years prior to joining Global View. Prior to Merrill Lynch, Adam worked 10 years, in several trading capacities, within the Commodity Lumber business.

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