Zero Steps To Take Before Contacting a Financial Advisor

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Sometimes it can be emotionally difficult to contact a financial advisor. Like feeling compelled to brush your teeth before visiting the dentist, some investors feel like they need to get their act together before they contact a professional. We have a mental list of excuses. I will talk to a financial advisor only after I get this one thing in order. Then, I won’t be so embarrassed, we excuse ourselves.

Feeling a little embarrassed is understandable anytime there is vulnerability, but don’t let such embarrassment keep you away from good financial advice.

If you try to get “some things straight” before visiting a financial planner, you are liable to put money in less than optimal places, miss out of tax-savings, and maybe even miss out of opportunities that could have been available to you if you’d had courage earlier.

A few years ago, I met a man who had about $10 million. He had never been to see a financial professional. He had made some bad decisions and had most of his money outside of retirement plans. I know you are probably thinking how lucky he was to have so much money, but I remember thinking what a shame it was that his mistakes were going to continue to penalize him.

For example, with most of his money outside of retirement plans, he had failed to take advantage of the tax planning strategies available. He had paid too much tax in the past and was now and would continue to be paying too much tax as a result of this decision over many years.

A good financial advisor moderates the needs of our future self with our current self. They strive to ensure that our future self is just as happy as our current self. They help navigate the complex tax law and find which savings vehicles we should use. They help us do the best we can with what we have. They know things that we don’t know.

Having a good financial advisor can help you with all the money questions you have. They can also help you prioritize things that you did not even know to ask about.

In 2019, Vanguard did a study entitled “Assessing the value of advice ” in which they measured three components of an advisor’s value: portfolio value, financial value, and emotional value.

Portfolio value attempted to measure the optimal portfolio construction to a client’s risk tolerance. This measured a portfolio’s risk/return characteristics, tax efficiency, fees, and rebalancing and trading activity.

Financial value attempted to measure the attainment of financial goals such as savings and spending behavior, debt levels, retirement planning (cash flow, income, and health costs), insurance and risk management, and legacy, bequests, and estate planning.

But perhaps the most interesting measurement was emotional value which attempted to measure financial peace of mind such as trust in the advisor and the markets, success and sense of accomplishment, behavioral coaching, and confidence.

The emotional outcomes accounted for 45% of the total perceived value of an advisor.

Another way of saying this is that peace of mind is probably one of the most important aspects of financial advice.

Doing retirement planning on the back of a napkin can be highly misleading. There is so much to say on the topic. Having a financial advisor to worry about all the complexity allows you to know you have done enough and enjoy today.

Don’t delay getting your finances in order until you get your finances in order. Ask for help today and see what wisdom a financial advisor has to share. The younger you do this, the better the outcome. The average age a prospective client comes to see us is age 61. Our clients would benefit from our services even more if the average age they came to us was 51, 41, or even 31 years old. With more time, each technique we implement has more time to grow in value.

We wish that everyone came to us at a young age. Our youngest clients were just born this year. Their financial outlook is very positive indeed. Helping young people save and invest is a delight.

No newborn has any embarrassment. They simply come and accept financial advice. So can you! To get started, give us a call or fill out our contact form today.

Photo by Robert Crawford on Unsplash

Follow David John Marotta:

President, CFP®, AIF®, AAMS®

David John Marotta is the Founder and President of Marotta Wealth Management. He played for the State Department chess team at age 11, graduated from Stanford, taught Computer and Information Science, and still loves math and strategy games. In addition to his financial writing, David is a co-author of The Haunting of Bob Cratchit.

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