It is interesting to know who is asking these questions. Often it is a do-it-yourself or someone trying to figure out if they are missing something. They wonder if they need a professional now or in the future. I am going to give you answers to these questions. I want to provide you with the ammunition and tools you need to know if a financial advisor is right for you.
I want to give you the insight to judge if you are getting the kind of attention you need. You need to be asking the right questions. Can a financial advisor help me with my 401k plan and the allocations of my 401k? Can they help me with my estate plan? Can they help me with my income tax management, or is the financial advisor just trying to sell you their products?
What Exactly is It Advisors Do?
What exactly is it that financial advisors do? The real answer to the question is complicated without interviewing the financial professional myself. So I would say it depends. An advisor may help people with estate planning and income taxes. In my interview, I would ask how often they are helping people with these services. I would like to know what their success rate is and how effective are the different tools they use. I would ask about the other professionals they might refer you to. The intention here is to help you understand what is reasonable to expect from a financial professional. I believe it is fair to expect everything. You can assume your advisor should be the quarterback in the organization. I believe this is what you can expect if they do not have the answers to your questions. They should be able to direct you or at least be your advocate for what you need. If they do not know the answer, they should tell you, “I’m not sure about that.”
You know what? I’m not sure that’s something I don’t know.
Personally, although my licensing covers medicare, medicare supplements, and health insurance, I’m just not interested in it. I don’t feel like I understand these subjects well enough to speak on it and give advice. However, there are two or three professionals that I would refer to others. I utilize them myself, I am comfortable with them, and I have had a good track record with them. Because I have a history with them, I’m comfortable referring other people to these professionals. You may ask me about those subjects. George, what do you think? My answer would be, “I don’t know.” You may talk to the person that I refer you to and think; I don’t know if I like them. I don’t know if they know as much as I know. That’s alright. Don’t inappropriately expect a financial professional to be an expert in everything. Some retirement planners are just stars. It feels as if they know a little bit about everything, and they are a “Jack of all trades.” They know enough to be able to share with you. Yet, they are able to say; I don’t know enough about that, let me refer you to someone who does. Hopefully, that is the case for you.
Don’t inappropriately expect a financial professional to be an expert in everything. Some retirement planners are just stars. It feels as if they know a little bit about everything, and they are a “Jack of all trades.” They know enough to be able to share with you. Yet, they can say; I don’t know enough about that, let me refer you to someone who does. Hopefully, that is the case for you.
I’m going to compare the financial person to the medical profession. You could be seeing a doctor, a nurse, a lab technician, and all are medical professionals. In the case of a financial professional, you can have a whole range of skill set that falls under the title of a financial advisor. So let’s break this down.
The Golden Years of Retirement
This is what I hear from our clients and others. I believe the most important questions are the golden questions as you approach these years.
- You are hoping that everything is in place,
- You are not going to be disappointed with your results
- You are not going to be disappointed with your income
- You are going to have consistency
- You are going to be able to depend on your future, no matter what happens, (physically, mentally, neurologically) as long as you live
- You are going to be happy
- You feel at peace
- You feel tended to
- You feel like you have an advocate
Your Planning Advocate
A financial person needs to be an advocate that you know is working for you and your family. My mother is a nurse, and my sister is a pharmacist. I have always felt that I had a medical advocate. No matter what happened to me, I felt like I would be taken care of.
Next is a feeling of freedom in retirement. You want the feeling of freedom, so you can do what you have spent a lifetime preparing for. Whether you have a financial professional or not, if you don’t feel peace and have freedom, you should be asking some good questions.
The Proof is in the Pudding
Just like that line in the movie, Jerry McGuire, “show me the money!” Show me the proof. You want it to be demonstrated mathematically that even in the worst-case scenario you are going to have your needs met. You do not want a statistical approximation. I am an engineer, and of course, we like statistics. We want to know with absolute certainty that you are going to have your needs met. We are going to show you mathematically. It is going to happen no matter what happens in the stock market, politics, elections, economy, world trade, etc. You are going to get your needs met. You are going to be able to prove it mathematically.
What Services Do Financial Advisors Offer?
Some assets advisors buy and sell:
- Mutual funds
- Exchange-traded funds
- Life insurance
- Private equity
- …all of that stuff and more.
All of these are financial services. Some advisors specialize in doing analytical work. Some advisors specialize in selling a type of boxed item that can provide assets for you. What are the key factors? Is the financial professional providing you with a peace of mind? Are they able to facilitate a feeling of freedom for you? Are you able to do the things you want to do? And finally, can you prove it mathematically? These questions should be in your mind the entire time as you are evaluating a professional. Our number one intention is to equip you to get the results that you expect. The number two objective is for you to avoid regret. We want you to avoid looking over your shoulder and thinking, I wish I would have asked that earlier. I wish I would have known that earlier. I wish someone would have told me to be more aware of that earlier.
Different Financial Professionals
I am going to return to the comparison of financial and medical professionals. In the medical profession, you can have a lab technician that gives you an impartation of knowledge. You may think, gosh, that is just what I needed to hear. Where did that come from? That is awesome knowledge. However, the opposite may happen when you consult with a doctor. You may think, I know you are a physician with years of education and experience. But, this is not helping me at all. This is not what I need. Someone else needs to take a look at my situation. I need better advice than I feel you are giving me and as with the medical profession, asking the right questions will help you find your financial advocate. We are going to provide you with these questions.
Enjoy the Life You’ve Been Accustomed Before Retirement
You may interview someone that is so myopically focused on what is happening with a particular stock. They may point to this stock because of some fundamentals or because of this or that. It may have nothing to do with your overall plan. When someone likes a particular investment, you want to be prepared with these questions. What does that have to do with my income? What does that have to do with my income taxes? What does that have to do with my inheritance? What does it have to do with my ability to enjoy the life that I have been accustomed to? What does it have to do with inflation over the next 20 years or with changes in interest rates? This particular stock may have nothing to do with you. In this case, you want to have a holistic approach. We will go back to a medical analogy. Western medicine has been trained to look at the condition. They focus on what is happening with that condition and how to treat it. Eastern medicine looks at what is happening with the whole body. They review the big picture and analyze all systems that might be affecting that particular symptom.
Here’s the Takeaway for You
What is a financial professional, and what do they do anyway? To answer the question, I will reiterate. They give you peace, they provide you with freedom, and they give you proof. You may be the person that says; I’m my own financial professional. I have this covered. Because I do have peace, I have freedom, and I have proof. Although, If you don’t feel that way and you have questions, there are other areas where you can get additional information and answers. If you feel like you have proof, but think, is this really proof? Is there something I am missing? Or if you feel like you have freedom, but still feel there might be something lacking, you can contact us. If you want to contact us, please do, but it is okay if you don’t.
As I always say…If it’s worth watching, listening to, or reading, then it’s worth sharing. Discuss this article with others. What I am most interested in is your feedback. I want to hear what you think. Would you say this article is good? I like the way you broke it down. It is all useful information. I have not heard it said that way. This is something I should share with others. That is why we are here. Our goal is to be a benefit to you.