What does a financial advisor do

What To Expect From A Financial Advisor

Does it feel like a dentist appointment or a valued partnership?  Does your advisor ask meaningful questions?  The person you hire to handle your finances should do more than manage your money. Before you skim the list below, what do you think a financial advisor should do for you?

Let’s be honest: finances are a vulnerable topic.  Trust is paramount in this relationship.

If you’re serious about putting your money to work for you, your advisor should address multiple aspects of your life, some financial and some psychological!  Here’s what we think you should expect from your financial advisor:

Psychological Considerations

  • Listen – Your advisor has 2 ears and 1 mouth; make sure they are utilized proportionally.
  • Question – How often are you asked thought-provoking questions that make you pause, think, and in some cases, cry? This is how we properly diagnose!
  • Diagnose – You shouldn’t be prescribed a solution to a problem that isn’t thoroughly diagnosed.
  • Strategize – This requires an understanding of what makes your family tick (both good and bad). Remember, your plan represents a fluid strategy that’s specific to your situation.
  • Reasonable vs. Rational – Don’t get caught up in something being perfectly rational; humans are not spreadsheets, and your advisor understands that.
  • Goal Setting – Not sure what those goals might be? Then you should, at a minimum, be exploring your possibilities.


Financial Considerations

  • Craft your Net Worth Statement – Where are you exposed?
  • Cash Flow Planning – Would a systematic investment take the emotion out of it?
    • Are you in retirement? Then executing Withdrawal Strategies to maximize tax efficiency is more appropriate.
  • Develop an Investment Policy Statement – This isn’t about pegging you to a risk score. It’s about engaging in a dialogue about your emotions and feelings as it relates to volatility.  Then, let’s view that in the context of your cash flow needs and goals.
  • Portfolio Rebalancing and Tax-Loss Harvesting
  • Asset Allocation and Asset Location Assessment – Emphasis on the second part: are you kicking a “tax can” down the road? How big is it?
  • Tax Planning – Think you make too much to contribute to a Roth IRA? What about Roth Conversions?
    • Have you talked about generating tax-alpha via direct indexing?
    • Your advisor should coordinate with your CPA when executing financial planning strategies.
  • Liquidity Needs – Have you explored a cash-out refi? What about securities-based lines of credit?
  • Assess Insurance Protection – This includes Long-Term Disability, Life, Long-term care, Health, Auto, Property, Umbrella.
  • Stock-Based Compensation Analysis – Don’t exercise your options or sell the stock blindly!
  • Estate Planning – Your advisor should coordinate the beneficiaries on your accounts with your estate docs.
    • Are your accounts appropriately titled to avoid probate?
    • Do you make charitable gifts? How frequently?
  • Employer Benefits Review – Are you maximizing the benefits available to you? Don’t pass up free money!

Last but not least…

  • Review the Advisory Fee
    • Just because you don’t receive an invoice doesn’t mean this partnership is complimentary. Make sure the value you’re reaping exceeds the cost.

So, what’s the result of all of this?  You delegate critical decisions that would take you a considerable amount of time to research on your own. How do you value the peace and confidence that comes with that? Contact us when you’re ready to connect.