Very often the public gets confused with the term "financial advisor". A stock portfolio manager or mutual funds salesperson would be better known as "investment advisor" as they typically offer services that deal more with how the money is invested and less with how to manage the money you actually have and how it relates to your lifestyle. Too often they neglect to ask the really important questions:
1) Have you planned for contingencies should these investments take a tumble?
2) How much money is needed to retire at your current lifestyle?
2) What rate of return needs to be earned to retire at your current lifestyle?
3) How long will you need to continue to work to retire at your current lifestyle?
4) When retirement occurs, how much will your lifestyle need to be reduced?
5) Social Security planning. Our experience with takeovers from investment advisors' limited planning has indicated much attention needs to be given to tax efficiencies prior to retirement planning, as well as cash flow, the (unplanned until they meet with us) impact of losing those business-related deductions, and the like. There is far more to financial planning than asset allocation in a portfolio.
This is particularly important because most consumers have unrealistic expectations regarding retirement and do not realize just how much money and where their money should be prior to retirement. Expenses may actually increase following retirement, especially as it relates to healthcare, and there may be other factors that financial advisors cannot take into account because the client is unwilling to share or does not think to share. Financial planning is complex and requires more cooperation between client and advisor.
In order to help answer these questions and foster cooperation, true financial advisors should ask about your mortgage, your hopes and dreams, how you pay for things, and anything else that may be driving your desire to make an investment or save for the future. They should possess good interpersonal skills and an ability to get at these topics, as well as build a relationship. When this is accomplished, clients will be more willing to share their plans and find greater value in the services provided.
These are important matters and require time and care, not simply taking your money and parking it somewhere to gather value. The real value of a financial advisor is more than the price, and when the client discovers that additional value, mutual understanding and better results will follow. Building trust will lead to more information and greater options, and will provide superior service to that offered by investment advisors.
At your Service.