How a financial advisor can help you bring all life’s ‘financial puzzle pieces’ together
The successful start of many client advisor relationships depends on how an individual or couple feels about using professionals and their perceived need for help. An individual’s “financial makeup” is complex, and not all people like input or are even open to advice. It has been said that advice is more easily digested when sought.
What are the real benefits of working with a professional financial advisor?
If you google “who should use an advisor,” you’ll likely see results that point to people who lack time, interest, or expertise. As a practical matter, some of our clients do fall into one of those situations. However, the majority of our clients are quite the opposite — they are men and women who are well-versed in finance, understand financial modeling, or may consider themselves a financial DIY-er who seeks help filling in their gaps of knowledge and brainstorming about the possibilities.
The benefits of an advisor’s guidance and coaching will vary based upon one’s opportunities and prospects, discretionary income, ability to save and focus on long-term goals, financial situation, and Money IQ and EQ (or financial instincts).
Advisors Help You Hone Your Financial Instincts
Money IQ is one’s technical financial knowledge. Do you need help in pulling all the “technical” pieces of your financial puzzle together? The IQ consists of knowledge about such things as investments, strategies, retirement rules, retirement planning, taxes (strategies, planning, and minimization), insurance needs, and estate planning. Your financial advisory team will have the expertise necessary to navigate each and every aspect of your financial situation.
Money EQ pertains to money emotional intelligence. Many people can recount their first “money” experiences from a young age, and how it has been ingrained in their life. Some are positive experiences, which might have taught the value of saving, while others might impact one’s outlook on risk.
Early in my career, working with clients who were children in the Depression era was commonplace. I was unusually well prepared by watching late night TV. Starting at a young age, I rarely missed watching The Tonight Show, and etched in my mind is one night when Don Rickles was harassing Johnny Carson about Carson’s wealth — one of Rickles’ many appearances on the show. I believe the subject of Carson’s wealth was brought up after Carson had crossed the threshold of the first $1M television contract. After continued prodding, Carson became very irritated, clenched his teeth, and said “Look, having a lot of money only means I don’t have to worry about money. I have the same concerns that everyone else has that cannot be solved by money.” From that point forward, the idea was planted in my head that money had a context, and that it was very personal.
What are your beliefs about money? What are they based upon and how do they impact your decision-making? Can you maintain your strategy and plan, and adjust as the needs arise? An advisor will help you balance the various trade-offs between rational decision-making and desires.
The Benefits of Approachable Intelligence
Aside from putting all the pieces of the financial puzzle together, Advisors learn a lot about Money EQ from clients. Over the course of many years, we get to see a wide range of thoughts and insights in how people view their money, which continually expands our ability to see a broader range of possibilities (in real life), beyond just technical knowledge. Working with a variety of clients, in a variety of different situations, brings forth what we call an “approachable intelligence” to our responsibility as independent financial advisors. Our extensive client engagements, experiences, and workshopping amongst our colleagues keeps us “out of our own head” and helps us to do the same for our clients.
So if you’re among the estimated 71% of the U.S. population who could benefit from working with a professional financial advisor*, don’t be afraid to take the next step. You have everything to gain, and nothing to lose.
*2020 Northwestern Mutual study found that 71% of U.S. adults admit their financial planning needs improvement. However, only 29% of Americans work with a financial advisor.