Financial Wellness: Does your advisor care?
The global pandemic has altered many perspectives on the working world – from recognizing our dependency on essential workers and appreciating the struggles of small businesses to honouring the sacrifices of healthcare staff and adapting to the realities of schooling and working from home.
During this time, we’ve heard from a number of people who have decided to rethink their relationship with their financial advisor. This is unsurprising, as periods of unusual stress or uncertainty often reveal who is really looking out for us.
Care versus caring
Imagine for a moment that you are a dentist, a skilled practitioner who prides yourself in exceptional dental services. Your practice extends beyond dental care. A clean, comfortable waiting area, a friendly receptionist, strategies for calming nervous patients, accessibility help for elderly or patients with mobility issues, maybe a toy box for children.
And even when a patient is in the chair, you and your staff act as first-line medical professionals, alerting patients to underlying health problems, from stress and anxiety, to eating disorders, to cancer. This goes far beyond oral health to caring for an individual’s overall wellbeing. It’s not dental care. It’s dental caring.
When it comes to financial advice, financial advisors may have a duty of care, but they lack a duty of caring. Quite often, they are seen as a commodity, and there are many who act accordingly.
Boilerplate advice, boilerplate investments, one-size fits all. Just save your millions and retire. The media doesn’t help the cause of good financial advice, because caring financial advice doesn’t make the news. What makes the news is fraud, high-pressure sales tactics, and hidden fees.
Our industry hasn’t helped much, with investment return ads that nurture an audience of performance addicts – with financial needs and goals either non-existent or taking a back seat.
Here’s an example. I recently had a client come to me who had had three financial plans done previously by three different advisors. The issue? These financial plans were done upfront as a sales tool, and were never referred to or updated later. It was a means to an end, and nothing more.
No wonder my client was frustrated. While someone may have been monitoring the tactical part of his portfolio (his investments), no one was reviewing the strategic part – his life and financial goals – even though these were changing over time.
The benefits of a caring advisor
Just as you need and deserve a caring dental provider, you need and deserve a caring financial advisor. Someone who looks beyond your assets and future income potential and focuses directly on you and the life you’re living – and keeps looking on your behalf as your life changes.
That part is critical, because you’re sure to have financial needs that change and go beyond just saving for retirement. You may want to expand your business, or provide for a special-needs child, or buy or sell a vacation home, or plan for your future legacy, or any number of things.
The benefit of a caring advisor is the planning, advice and investment expertise they provide is aligned with your needs and goals – and it’s reviewed and updated to ensure that it stays aligned. From saving and investing for retirement, to taxes, to succession, to your estate – the expertise and planning is unique to you and will change as your needs evolve.
During times of unusual stress or uncertainty, whether it’s due to economic challenges, a global health emergency, or unforeseen events in your own life, the guidance and communication you receive from a caring advisor will be even more frequent, proactive and personalized – not less.
Look for a caring advisor
How can you tell if an advisor you meet – by design or by chance – is a caring advisor? Like any relationship, trust your intuition.
What will caring advisors do? They will probe – by asking questions and listening. It’s not just because they’re polite. It’s because they need to know what you want to do in life with your money, your life situation, your personal and business goals, your fears and challenges.
They will try to open you up to get to the root of “you.”
What will an uncaring advisor do? They will talk, not listen. They will tell you what they can do for you before they even ask what you need and what you hope to accomplish. And your financial plan will sit on their computer gathering digital dust, even as your needs change.
If you’re looking to fast-track an intuitive assessment of an advisor, ask them this simple question: why are you a financial advisor? You’ll get a lot of different answers from different advisors, but the caring ones will shine through.