You may wonder why I’m telling you about my mom, but helping her was one of the main reasons why I started olivetree financial coaching. Don’t worry, she has given me permission to share her story and to use her picture.

 

Several years ago, mom’s second husband passed away and she asked me to look at her finances to make sure that she was going to be ok (financially, at least). She had originally hired a Financial Planner who worked for one of the major well-known name brand banks. I looked at her portfolio and noticed a couple of things that concerned me:

 

• Many of her funds had rather high fees. One (coincidentally offered by the same major bank that her advisor worked for) had annual fees of 1.93% (on top of what the advisor was charging her).

• She had money in Real Estate Investment Trusts (REITs), including a fund that was investing only in German Commercial Real Estate. That made no sense to me because someone at her age does not need a fund that adds exchange rate risk (the fund invests in Euros) to normal investment risk. In addition, the fund had an expense ratio of 1.35% (again, on top of what the advisor was charging her) as well as a fee just to invest in the fund (a front end load)

• Speaking of front end loads, out of her 20 investments, 7 had front end loads and another seven paid commissions and/or had fees for trading.

• These 20 investments were meant to drive ”diversification" and included individual stocks (an oil company and a gas pipeline operator).

 

I don’t know whether the advisor received commissions or bonuses for putting mom in these investments, but I do know that individual stocks and German REITs are NOT suitable for a (then) 75 year old woman who wanted financial peace of mind.

 

Reviewing her portfolio inspired me to go back to school for a Masters Degree in Financial Services. Once I earned my degree, I prepared for and passed the CFP® exam, and decided that once I left corporate America I’d start my own firm. That firm is olivetree financial coaching. Where I’ll treat you like I treat my mom.

 

You’ll be happy to know that mom’s portfolio now is mostly in safe Federal Money Market funds and low cost stock index funds (to insure for inflation and longevity risks). We have dividends sent directly to her checking account, which supplement her Social Security income and provide plenty for her to live comfortably on.

 

In addition, Mom’s portfolio is sustainable, holistic (as it takes into account all of her finances), aligned with her values, personalized to her needs, and effective in providing her income in retirement. Indeed, we have put Mom’s investments in SHAPE.

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Email me so that we can start getting that plan into SHAPE.