Three Financial Situations I Hate to See (And How You Can Avoid Them)

When I was young, I hated bugs. This was a problem because I loved ‘helping’ my grandparents and great-grandparents garden. My grandmother still laughs while telling the story of how I would call any bug a bee and run inside screaming ‘BEE!!!’ at the sight of a fly.

Thankfully, I have gotten over my hatred of bugs. But I do come across recurring situations in my line of work that I hate. We don’t talk much about what we hate in our professional lives, but I think there’s a place for it—not as complaints but to help others sidestep avoidable pitfalls.

So here’s my list of things I “hate” in personal finance.

When people are sold products under the guise of being advised

There’s nothing wrong with sales – there’s a time and a place for it. But when someone is seeking financial advice and trying to be a good steward of their money, I hate to see the person on the other side of the table have sales incentives that will naturally impact their advice.

A way to avoid this is to make sure you are working with a qualified advisor. CERTIFIED FINANCIAL PLANNER® designation is a good industry standard that can help you determine this. You also want to understand their compensation. Are they paid based on products? Keep in mind that if someone says they’re paid through a mix of salary, referrals, and investments, the ‘investments’ piece may refer to commissions.

When an account is set up incorrectly

For example, I have seen a situation in which an individual got married, named his spouse as a beneficiary, got divorced, remarried, and then passed away. He never changed his beneficiary, and his account went to his ex-wife.

This is why it’s critical to ensure your beneficiaries stay up to date. Consolidating accounts where it makes sense can help with this, especially because you want to ensure your asset allocation across all accounts is appropriate. I have also seen a situation in which an individual set up their retirement account, contributed for 30 years without revisiting their investments, logged in to plan for retirement, and discovered the money had been sitting in cash the entire time – his account had not been growing for the past 30 years. It was devastating and is a great example of why reviewing accounts and consolidating over time to simplify your finances is important.

When advisors don’t do what they say

Countless clients have come to us after another advisor failed to follow through. Sometimes, it’s as simple as not returning phone calls. Other times, it’s missed action items. For example, an advisor told a client he was processing Roth conversions for her but never had. Because of his mistake, the client paid more in taxes than she should have. I hate to see someone working with an advisor they can’t trust, as trust is foundational.

Bugs were easy to run from. Financial issues often aren’t. But with the right guidance, they’re manageable. We’re here to help, so don’t hesitate to call or email.

Hannah Whatley,  CFP® , AIF® is an Advisor with Rather & Kittrell.