As an advisor, I must show why a client should pay me to give them advice. If clients can do it all by themselves or hire a computer to invest, what is the true value of having a financial advisor? Is it really worth it?
To become advisors, we educate ourselves with hours of schooling, readings, and trial and error. Practice makes masters, and because we make more financial decisions in one year than one single person will make in a lifetime, after a while some knowledge becomes innate.
We know time in the market is more important than timing the market.
We also know there are certain money scripts and financial behaviors which make it difficult for investors to make objective decisions. Some clients experience a change in the amount of risk they can tolerate, depending on market conditions.
We cannot control what the market does, but we can control how we react to it.
To create the path to living your life by design, you need a plan. Work with an advisor who uses personal financial planning along with investment allocation.
I want to fully understand your goals and objectives. Maybe you want to fund your daughter’s wedding or your own long-term care. The more detailed, the better, because it helps me to know if your ideal retirement dream is to play golf five days a week or finally open your own business.
For any other profession, we expect to pay for the services we receive. If we have an attorney prepare a contract, we know they will bill by the hour. At our annual check-up, our family practitioner may order tests to rule out certain conditions. These professionals have a duty or an oath to do what is best for you. We trust them and trust their knowledge.
Advisors work in a similar fashion. We truly care about the financial and personal well-being of our clients. Because we know you and your family, we are objective and subjective. We can make decisions in your best interest the same way you can. The only difference is we have the ability to step back and take the personal out of the equation or, when necessary, add the personal back in.
Because I have a commitment to education, I appreciate my clients who care enough about their personal situation to do their research, or who may use a robo platform to dip their feet in to check the water’s temperature. But, just because I type in a few symptoms in WebMD does not mean I should diagnose myself. Most client situations are unique, whether they are getting started with investing or have been doing it for a long time.
Next time you are wondering about the value of a financial advisor, ask yourself: How much is your time worth? Would you prefer to spend countless hours researching mutual funds or equities, or rather go out on a bike ride in the spring? Will you truly feel confident to place your family’s legacy in the hands of a robo platform, or would you like to call a person just like you? A person who has helped you build a personal financial plan to live your life by design and not by default? An advisor who you are confident in, who you trust, who understands you, and who always has your best interest at heart?
Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns.