Times are uncertain. The decisions you make right now have the potential to impact your long-term financial, and perhaps general, well-being. The importance of understanding the current market environment—inflation, interest rates, the Federal Reserve, geopolitical issues, and the impact these important topics have on you, can’t be stressed enough. Wisdom, as a core value, empowers you and offers confidence and comfort along with it. In terms of finances, it’s wise to meet with a financial advisor to understand the current market.
Did you know the S&P 500 has averaged a 14% intra-year decline since 1980? Or that nearly half of the returns on the same index come in just 10 days, over a 20-year period? How about that portfolio allocation accounts for more than 90% of an investor’s success, while market timing, individual security selection, and other factors account for less than 10%? More surprisingly, market timing done perfectly has very marginal gains on perfectly wrong timing.
Other things matter more!
Therefore, it’s so concerning that so many investors go alone, or work with an advisor that doesn’t put education and wisdom as a pillar of their practice. This is just one example of what you should expect in a financial advisor.
Looking for a More Meaningful Engagement
If you asked your advisor how they add the most value to you, what do you think they would say? Try it. You’re likely to hear a spill on investment strategies, stock or fund picking, a unique financial planning process, or something similar. These things are important, just like having a doctor that knows how to operate, or an attorney that knows the law, but they should be minimum standards.
Do they know you, understand you, or connect with you on the things that matter most to you? Are they your financial advocate?
An advocate is a person who supports a particular cause or policy and advocating for another person means to plead their case, for their benefit, or on their behalf. The true value of what a Financial Advocate can do for you and your family far surpasses investments and general financial planning.
Stress Plus Information Overload Equals Anxiety
When someone hires a new financial advisor (or for the first time) it is usually because there has been a transition in their life, and they need help—retirement, the death of a family member, a divorce, or a career or lifestyle change.
These transitions also come with a wide range of emotions and reactions—from anticipation and celebration, to dread, anxiety, grief, or even paralyzing fear. During these times, the decisions made, and paths chosen, can impact a family’s financial legacy for years to come.
There are so many options available that it can be hard to know what type of help you really need.
Financial advisors come in many forms. A lot began their careers as salespeople, hired to find new clients and open accounts. Others started their own practices and labeled themselves financial advisors. Or they may only have completed something as basic as a state life insurance licensing exam.
So how do you figure out what’s best for you at such a crucial time in your life?
Taking Ownership
Ultimately, when it comes to your financial health and well-being, you are responsible for your own decisions. Know what’s most important to you. Empower yourself with knowledge. Look for someone you can connect with on a personal level. When you find the right advisor, they will be your Financial Advocate. You will feel confident, comfortable, and connected to them.
There are a lot of good ones out there!
