My Life as a Client: Just Listen to Me!

For many years, I worked at IBM and had a company-matched 401(k) plan. I have an MBA in finance and accounting. I’m financially literate. So I self-managed it myself for a long time, electing how I wanted my money to be invested. I had a balanced portfolio, maybe leaning on the conservative side. I was pretty happy with it. Even during the 9-11 market crash, I wasn’t worried.

Then my niece got married about seven years ago, and her husband was just entering the financial management area. My sister put some pressure on me to support the family and give him some business. I started using him for my Roth IRA and some minor investments, keeping the bulk of my money in my 401(k).

But as a new advisor, he didn’t invest well. The stocks underperformed the market. I wasn’t happy about the situation and discussed it with him. He admitted he probably didn’t know enough to make the right decisions.

Then, two years ago, a friend who is a wealth advisor started putting the hard sell on me. He took me out to lunch a few times and talked about how he could do better for me than I was doing myself. He intimated that because he’s a financial advisor, he could keep me on my current path, but do even better. He said, “Don’t you want to make more money? Don’t you want to be wealthy?” But I wasn’t that motivated. I just wanted to be comfortable—to not have to worry about money.

I ended up transferring most of my 401(k) to him. Then he put it in extremely risky investments. He just didn’t listen to what I wanted. When the market went up, we went up about the same as the market. But when the market declined, my stocks declined significantly more. He put me high in the top right quadrant, no diversification, in companies that had very wide swings. And he kept telling me, don’t worry about the short-term.

He’d check in with me every couple of months, and I would present ideas. He put money into bonds and mutual funds at my insistence. But in general, he just didn’t get me.

When the stock market dipped earlier this summer, I looked over my portfolio. If I’d kept all my money from the beginning of the pandemic with IBM, it would have gone up 12%. But my money with him went down 10%. I saw the writing on the wall. I didn’t want the risk. I’m not a gambler.

In the meantime, several years ago, I joined a LinkedIn group for business leaders in the Research Triangle, started by a financial advisor. He and I interacted mostly about general leadership questions at first.  We naturally built a friendship. It wasn’t a hard sell. We ended up having four in-depth meetings, and he did a true financial plan for me. He asked a bunch of questions about whether I was conservative or middle of the road. He really explained everything. And he indicated he understood where I was coming from.

I sent the old advisor a scathing email. I told him I was totally disgusted with my investments and my retirement plan was basically ruined. And I moved everything over to the new advisor.

I retired from IBM in 2010 when I turned 55 and started my own business, a diversity consulting firm, running it part-time. After George Floyd was killed, diversity initiatives went way up, and I started working full-time. When I turn 70, I’ll retire. I’ll max out my Social Security and I’ll have my savings and my pension. I’ll be OK.