“Does Your Financial Advisor Have Your Back?”

These are scary times for investors, particularly retirees living off of fixed income and savings accounts.

Last Friday, the Dow fell 1000 points, reaching a 20% decline for the year for most stocks.  Many analysts expect a bear market in stocks as market forces work against equities.

The Federal Reserve is anticipated to raise interest rates 50 basis points at its May meeting – this follows a 25 basis point increase in April.  Many analysts have concerns that the Fed could push the economy into a recession.

Bonds which many retirees rely on for living expenses, have seen their values plummet as yields rise.

The increase in the Fed rate also affects mortgage rates, loans and credit cards which have seen their rates skyrocket.

What is an investor to do? 

It’s time to have a candid and extensive conversation with your financial advisor.  Investors need to discuss whether their accounts are set up to meet their financial goals.  Investors should adjust and update their financial plans to make sure that they have enough money for retirement and can weather any financial storm.

A good rule of thumb is the 4% rule - - retirees should only withdraw 4% of their savings on an annual basis. Given inflation, investors need to review whether the 4% rule makes sense under current conditions.  Retirees do not want to outlive their retirement funds.

While this may be painful and time consuming, it is time for investors to sit down with their financial advisors and make sure that their investment goals are being met.

If an investor believes that a financial advisor has ignored or violated their financial goals and risk tolerance, it’s time to consider whether to bring a FINRA arbitration case against the advisor to recover losses for unsuitable recommendations or investment fraud.

Information regarding filing a claim can be found at FINRA.org.