‘I’ve seen my accounts drop by 22%.’ My financial advisor has generally done well, but now it seems that he is not making enough adjustments in this tough market as I am losing large chunks of money. What’s my move?

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Ask: I have had a financial advisor with a national firm for over a decade. We have done well and your fees are appropriate at 1%. His firm’s strategy is to buy a basket of shares, and there are literally dozens in each of my accounts. It generally does the same thing as the S&P, outperforming it some years and a notch or two lower in others. In a couple of years, even heading into 2022, I’ve gone up significantly in the market only to see my paper gains dissolve in a few months or more. I have asked him/her on several occasions if he/the company adjusts the shares they have in my account to take into account market changes, as there is not much trading in any of them. I know that one should not try to time the market.

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However, should I expect my broker to make adjustments to my accounts during times of significant market changes? I have seen my accounts drop by 22% or so this year and wipe out all 2021 paper earnings and then some. His answer is “we are doing better than the market in general”. Okay, but I’ve asked several times this year if they were looking at adjustments (eg power, anyone?). Should I question or just keep feeding the beast every year with additional investments and worry about downside risk as I near retirement (at least five years from now)? I don’t need the money and I’m still putting in six figures a year, but I also don’t like to see my earnings disappear in large amounts.

Answer: First, it’s reasonable to expect regular updates and adjustments to your accounts, anywhere from once a year to once a quarter, says John Piershale, a certified financial planner with John Piershale Wealth Management. “Common stock models have goals like capital appreciation or earnings and most stock models have regular updates, some more than others. Keeping your model updated and rebalanced on a regular basis can allow you to take outsized gains from some sectors and apply them to others,” says Piershale. While this doesn’t prevent loss, it can help reduce the overall risk in your portfolio, he adds.

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That said, you don’t want too much movement in your account, as you may incur fees every time you make a transfer or transaction. That’s not to say you should never make adjustments, but experts advise limiting rather than constantly changing things, which can cost you dearly.

It also sounds like you and your advisor might not be aligned on your risk tolerance, says Aaron Klein, CEO of Riskalyze, a financial technology company that provides software that analyzes investment risk. “If I were you, I would find a fiduciary advisor who could give you a second opinion. If someone else can give you a better way forward with less hassle than you have right now, it might be the right move,” says Klein.

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And Michelle Connell, a certified financial analyst at Portia Capital Management, points out that for someone like you nearing retirement, you may be taking on too much risk. When you’re building wealth, it’s okay to ride waves of market volatility, Connell says. But “if you’re close to retirement or want to protect what you’ve built, an investor should switch to risk management mode. Your job and your advisor’s job is to protect your investment portfolio and therefore your future standard of living,” says Connell.

If you decide to go with another advisor, you’ll probably want to find one more focused on wealth preservation and risk management. Advisors accomplish this by taking steps such as “determining how much money or investments are needed to meet your distribution requirements, rebalancing your investments when you own too little or too much of an asset class, and assessing the downside risk of mutual funds being traded.” they buy. How much has the fund lost during any bear market? How does the fund’s bullish and bearish catch compare to its peers? Is the investor willing and able to take this kind of risk? Connell says.

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