Uncovering hidden financial pitfalls with Truthifi

Managing investments isn’t just about making the right choices—it’s also about avoiding the wrong ones. It’s easy to get lost in the details of individual investments, but what about the bigger picture? Seeing both the forest and the trees is crucial when it comes to financial health. From excessive fees to underperforming portfolios, financial blind spots can drain wealth before investors even realize it. Enter Truthifi—a powerful tool designed to expose these hidden financial pitfalls.

Let’s break it down. Below, we explore the key financial areas Truthifi monitors, explaining their significance and the exact warning signs it detects.

The core financial categories Truthifi monitors

1. Advisor oversight: are you in good hands?

Not all advisors have your best interests at heart. Some fail fiduciary duties, charge exorbitant fees, or have troubling financial or regulatory histories. Truthifi ensures transparency, helping you avoid problematic advisors.

2. Fee awareness: stop overpaying

Fees eat away at returns, and many investors don’t even realize how much they’re paying. Whether it’s high AUM fees, hidden costs, or overpriced funds, Truthifi uncovers excessive charges so you can keep more of your money.

3. Portfolio holdings: is your money in the right place?

From overconcentration to distressed investments, a poor asset mix can lead to unexpected losses. Truthifi detects potential risks in your holdings, ensuring your portfolio aligns with your financial goals.

4. Performance tracking: is your portfolio underperforming?

A portfolio should work as hard as you do. Persistent low alpha, closet indexing, and excessive conservatism can quietly sabotage returns. Truthifi pinpoints performance inefficiencies so you can take corrective action.

5. Provider transparency: who’s managing your money?

Financial institutions aren’t all created equal. Low transparency, excessive commissions, and poor linking options can make working with some providers more costly than beneficial. Truthifi shines a light on these hidden concerns.

6. Trade activity: identifying risky moves

Are you—or your advisor—making high-risk trades without you realizing it? Truthifi detects potential red flags like penny stock trading, wash sales, and excessive withdrawals, ensuring that your investment strategy remains sound.

7. Transaction monitoring: keeping an eye on account activity

Large withdrawals, early distributions, or a pattern of excessive fees could signal problems. Truthifi helps investors keep track of financial activity that might otherwise slip through the cracks.

8. Account setup: is your structure working for you?

A well-structured account maximizes tax benefits and mitigates unnecessary risks. From excessive hidden cash to missing retirement accounts, Truthifi spots inefficiencies in how your money is positioned.

Truthifi’s comprehensive diagnostics

Now, let’s get into the specifics. Below is a breakdown of exactly what Truthifi detects across each category.

Advisor red flags

• Account AUM fees above industry average

• Recent criminal disclosures

• Advisor not a fiduciary

• Recent regulatory disclosure

• Recent financial disclosure

• Recent civil judgment disclosure

• Recent bond disclosure

• Recent judgment

• Recent investigation

• Recent customer complaint

• Recent employment separation disclosures

Fee issues

• Portfolio fees above industry average

• Excessive fees for portfolio size

• High-priced funds

• Fee traps

Portfolio holding concerns

• Tax hostage

• Distressed position

• Imminent bond maturity date

• Missing cost basis

• Closet sector investor

• Large foreign exposure

• Hidden investment concentration

• Excess cash in managed account

• Foreign bond exposure

• Excessive domestic equity exposure

• Industry concentration

• Stock price risk

• Duration risk concentration

Performance warning signs

• Portfolio alpha extremely low

• Group alpha extremely low

• Provider alpha extremely low

• Account alpha extremely low

• Advisor alpha extremely low

• Low alpha streak - portfolio

• Low alpha streak - group

• Low alpha streak - provider

• Low alpha streak - account

• Low alpha streak - advisor

• Excessively aggressive portfolio

• Excessively conservative portfolio

• Closet indexing

• Significant accruing tax liability

• Uninvested distributions

Provider transparency issues

• Better available linking options

• Low-transparency provider

• Excessive commission

• Recent manager change

• Missed relationship opportunity

Trade-related risks

• Risky trade

• Penny stock trade

• Large withdrawal

• Reverse churning possible

• Excessive withdrawals

• Potential churning

• Early withdrawal from qualified account

• Excessive realized losses

• High turnover

• Short-term A-shares trade

• Potential wash sale

• Big loser

Transaction red flags

• Drop in dividend

• 1-month price correction

• 1-week price correction

• 1-day price correction

• Foreign company

• Unused account tax benefit

Account setup inefficiencies

• No retirement account

• Excess cash in fund/ETF

• Excessive hidden cash

• Missing advisor on wrap-fee account

• Exceedingly high-risk portfolio

• Low portfolio ESG score

Truthifi’s proprietary Truthifi Score

All of the findings Truthifi detects are rolled up into a single, powerful metric: the Truthifi Score (Learn more).

The Truthifi Score provides investors with an easy-to-understand rating of their overall financial health, based on the risks and inefficiencies uncovered in their portfolios. By consolidating findings across advisor practices, fees, performance, and account structure, the score delivers a comprehensive snapshot of whether an investor’s financial setup is working as expected.

With this score, investors gain confidence and clarity in their investment strategies. If the score reveals areas of concern, users can take corrective actions—whether that means switching advisors, reducing hidden fees, or restructuring their portfolios for better efficiency.

Want to ensure your financial setup is working for you? Explore our educational insights here: Is Your Financial Setup Working?.

Bottom line: take control of your financial future

The reality is—many investors lose money not because they make bad investments, but because they fail to recognize the hidden risks in their portfolios.

That’s where Truthifi comes in.

By identifying advisor red flags, excessive fees, holding imbalances, performance drags, and more, Truthifi empowers investors to make smarter, more informed decisions.

Are you ready to uncover what’s really happening in your portfolio? The insights are there—Truthifi just helps you see them.

Take control of your financial future today!