What To Expect From A Financial Advisor

Does it feel like a dentist appointment or a valued partnership?  Does your advisor ask meaningful questions?  The person you hire to handle your finances should do more than manage your money. Before you skim the list below, what do you think a financial advisor should do for you?

Let’s be honest: finances are a vulnerable topic.  Trust is paramount in this relationship.

If you’re serious about putting your money to work for you, your advisor should address multiple aspects of your life, some financial and some psychological!  Here’s what we think you should expect from your financial advisor:

Psychological Considerations

• Listen – Your advisor has 2 ears and 1 mouth; make sure they are utilized proportionally.
• Question – How often are you asked thought-provoking questions that make you pause, think, and in some cases, cry? This is how we properly diagnose!
• Diagnose – You shouldn’t be prescribed a solution to a problem that isn’t thoroughly diagnosed.
• Strategize – This requires an understanding of what makes your family tick (both good and bad). Remember, your plan represents a fluid strategy that’s specific to your situation.
• Reasonable vs. Rational – Don’t get caught up in something being perfectly rational; humans are not spreadsheets, and your advisor understands that.
• Goal Setting – Not sure what those goals might be? Then you should, at a minimum, be exploring your possibilities.

Financial Considerations

• Craft your Net Worth Statement – Where are you exposed?
• Cash Flow Planning – Would a systematic investment take the emotion out of it?
  • Are you in retirement? Then executing Withdrawal Strategies to maximize tax efficiency is more appropriate.
• Develop an Investment Policy Statement – This isn’t about pegging you to a risk score. It’s about engaging in a dialogue about your emotions and feelings as it relates to volatility.  Then, let’s view that in the context of your cash flow needs and goals.
• Portfolio Rebalancing and Tax-Loss Harvesting
• Asset Allocation and Asset Location Assessment – Emphasis on the second part: are you kicking a “tax can” down the road? How big is it?
• Tax Planning – Think you make too much to contribute to a Roth IRA? What about Roth Conversions?
  • Have you talked about generating tax-alpha via direct indexing?
  • Your advisor should coordinate with your CPA when executing financial planning strategies.
• Liquidity Needs – Have you explored a cash-out refi? What about securities-based lines of credit?
• Assess Insurance Protection – This includes Long-Term Disability, Life, Long-term care, Health, Auto, Property, Umbrella.
• Stock-Based Compensation Analysis – Don’t exercise your options or sell the stock blindly!
• Estate Planning – Your advisor should coordinate the beneficiaries on your accounts with your estate docs.
  • Are your accounts appropriately titled to avoid probate?
  • Do you make charitable gifts? How frequently?
• Employer Benefits Review – Are you maximizing the benefits available to you? Don’t pass up free money!

Last but not least…

• Review the Advisory Fee
  • Just because you don’t receive an invoice doesn’t mean this partnership is complimentary. Make sure the value you’re reaping exceeds the cost.

So, what’s the result of all of this?  You delegate critical decisions that would take you a considerable amount of time to research on your own. How do you value the peace and confidence that comes with that? Contact us when you’re ready to connect.

​What would have to go well personally and professionally for you to deem this relationship a success?

Some common answers I hear are:

• Establishment of a recurring investment program
• Implementation of tax-efficient strategies
• Be free of credit card debt
• Confidence that I’m on the best/right track

All of these goals have something in common: COMMITMENT.  Your commitment to the process determines your progress.  Don’t let outcomes outside of your control take up your mental space and emotional energy.

My goal for you is to make sure finances aren’t one of the thousands of thoughts that race through your mind before you eat breakfast.  I want you to breathe deeper knowing you’re on a path that’s reasonable and productive for your situation. 

It’s common for anxiety, disappointment, fear, and worry to creep in – this isn’t a failure. 

We’re emotional creatures that have to make decisions with limited information.  What happens when you face headlines, including market volatility, vaccine trials, monetary policy, delayed fiscal policy, trade uncertainty, geopolitical tensions, and looming elections?  The result is oftentimes imprudent decisions followed by regret.

Here’s a quote from Nick Murray, a highly regarded financial services professional with over 50 years of experience: “In my experience, all successful long-term investors are continuously acting on a plan. All the failed investors I’ve ever encountered up close were continually reacting to current events – and always the wrong way.”

I can’t time market returns, and I certainly can’t predict them. I’m here to remind you of your values and your goals so that you stay disciplined and committed to the course. If I’m able to help you with that, would you deem this relationship successful?

Feel free to shoot me a note when you’re ready to have an introductory conversation.

Get clear about where you are. 

Are you looking in the past?  If so, how does that serve you?  The important point here is to gain clarity about the big picture so you can cope with the unexpected. Life happens. 2020 happens.

Be specific but flexible when you think about the future.

What happens when you pivot from a job that you thought was forever?  What about when you have twins and were only expecting one?

Don’t delay life over being obsessed about a particular outcome.  If you wait to get it exactly right, you will be waiting forever! Don’t buy into a false sense of precision.

Maybe you delay thinking about the future for fear of getting it wrong.  If that’s the case, you’ll avoid this exercise altogether. Quit waiting for the “best” advice and consequently doing little (or nothing) to further your potential.

Wealthy vs. Rich – What’s The Difference?

A great financial plan has little to do with what the markets are doing.  What happens if you never save a dime in your life?  That’s not the market’s fault. It’s about defining what’s important to YOU and developing a road map for exactly that.

It’s your turn to truly think about what “wealth” means to you.  Do any of these concepts resonate with you when you think about wealth?

• Having the freedom to choose
• Measuring your life in experiences, not dollars
• Prioritizing investing over spending
• Framing decisions around a future outcome, not instant gratification

If you equate being wealthy to being “rich,” I’m not a good fit for you.

Let’s get a plan together so that you can live your life today. Schedule some time with me when you’re ready to chat.

Here are the top 3 responses I receive: security, independence, and freedom.

Even though this is a start, and we have to start somewhere, these sound like unquantifiable goals.  I’m looking to uncover the feeling behind those goals and the emotions you believe will result when you achieve them.  Here is what I mean:

Security

Sure, you might have an emergency fund to cover expenses for 3-6 months.  But what about when those funds run dry, and you’re still short on sources of income?  Where would you pull from first, should you encounter an unforeseen situation?  Are you concerned about paying for items such as:

• The cost of childcare.
• The storage of an embryo.
• A term life insurance policy.
• Waterproofing your basement.

Do you feel confident that your bare essentials are sustainable if there’s a drop in your earned income or a 30% market decline impacting your portfolio?

Independence

I look at this as being the next step up on the ladder from “security.”  This is where you don’t have to think about:

• Renewing your Amazon Prime membership.
• Overpaying for internet on your flight to watch the rest of the game.
• Buying the Express Unlimited Pass at Universal, or Super VIP pass at Lollapalooza.
• Making daily trips to get your extra-hot oat milk latte.

When you’re financially independent, you have multiple income streams to support your lifestyle, whether they’re active (earned income) or passive (money that kicks off of your portfolio).  It’s here that retiring early is achievable. 

If you think you’re already here, I challenge you: Are you up to date on current tax strategies?  What about the tax-loss harvesting potential in your portfolio?  Are you adequately insured, or do you keep overpaying for a policy that you don’t understand?  If you expect to live at least 20 more years, implementing these types of strategies can have a material impact on your financial situation.

Freedom

What exactly do you want to be “free” to do?

• Take a year off to travel with the family
• Stay on the beach instead of consistently booking 4 blocks away
• Quit your job to learn how to be a beekeeper
• Drop your day-to-day to financially care for a parent

Financial freedom means you don’t have to worry about where the money is coming from. It’s not about estimating the cost of your current lifestyle; it’s about quantifying the cost of your ideal lifestyle.  You have the power to choose what this looks like for you.  Don’t live a life on repeat if reflection and brainstorming aren’t part of your day-to-day.  Develop a roadmap and start building this vision.  Once you have that in place, it’s much easier to assess, refine, and integrate along the way.

Financial freedom and early retirement don’t happen overnight. This is a process, and there are plenty of mile markers along the way.  It’s my job to help you see what’s ahead by tackling one at a time. Schedule some time with me when you’re ready to chat.