by Bruce Helmer, President of Wealth Enhancement Group

Choosing a financial advisor isn’t the end of your responsibility. Regardless of whom you choose, you are still the CEO of your money and it’s up to you to ensure that you are gaining full value from your advisor’s services. No good advisor can tell you what to do; he or she can only make recommendations. So you still need to supervise your advisor and your financial plan.

Also, in recognition that some of you will insist on giving a financial plan a try by yourself, the advice here will help you do it as well as possible – assuming that you enjoy all the disciplines involved in creating and implementing a good financial plan.

If you intend to create your own plan, however, you have to be brutally honest with yourself from the beginning. Many people have the best intentions when they sit down to create a plan and they might even do a pretty good job. But that’s not where the biggest problems arise.

The real problems arise in the continuous management of that plan (bear in mind that these issues refer only to investment management, which is the tip of the iceberg in comprehensive financial planning):

• Preventing style drift in your portfolio or the funds in which you have invested;
• Rebalancing regularly to maintain the ideal asset allocation;
• Changing your allocation as your needs changes;
• Keeping abreast of tax changes that could give you a window of opportunity to alter your plan to your advantage.

After a while, many investors get careless and begin to let their plans slide. Their portfolio no longer represents the asset allocation they selected. Or worse, their asset allocation accurately reflects their situation or needs of 10 years ago, even though their lives have changed dramatically. So think hard, not just about the knowledge you’ll need to acquire or the time it will take to create a plan, but also about the commitment of time and energy to manage it effectively.