When Should I Stop Listening to My Financial Adviser?

Q: In 1999 I decided to take my money out of mutual funds and invest in the stock market with a financial adviser. Since I started working with him, I've lost $20,000 of my $80,000 initial investment, which was everything I had saved since I was a child. He tells me the market hasn't been good and that I need to make a long-term commitment before seeing any gains. Isn't nine years long enough? I believe my adviser spends his time on side projects instead of making money for me. I would like to withdraw my funds but am holding out hope for a recovery. When do I quit waiting?

A: Fear and hope are obstacles to wealth, and you're paralyzed by both. You have no confidence in your money manager, yet you've been unable to sever ties; it's as if you're putting his needs ahead of yours. Your fear is fueled by a trait I see in so many women, which is the inability to act in your own best interest if you think it might hurt someone's feelings. I want you to appreciate the invaluable lesson here: When it comes to your money, no one will ever care for it, need it, or respect it more than you.

If you feel in your gut that this relationship isn't working, listen to yourself. It's time to take back control of your money and never let go again. That means leaving your adviser and hiring someone else to look after your investments—you. It's my steadfast belief that if you want to find the best financial planner in the world, look in the mirror. As I explain in "Money Management Made Easy" (page 78), every woman can handle trading without help.

This doesn't mean all advisers are bad; I just don't think they're necessary for most people. You might consider one if your investments surpass $50,000 (some won't take on a client with less than $250,000). In that case, hire a consultant who charges an hourly rate, a fixed annual fee, or a percentage of your assets—say, 1 percent. (Never work with someone who operates on commission. It can raise a conflict of interest when he gets paid only if he buys and sells actively in your name.) I'm confident that over time you'll recoup what you've lost and build a strong portfolio.