With so many resources available online for an investor to be a “do it yourself-er,” one might wonder why they would even need a financial advisor. A good place to start would be to understand what an advisor actually does to earn their fee.
Part of the work we do for our clients is to quantify financial goals. We then craft a lifetime financial plan in an effort to achieve those goals. Next and then regularly, we advise on funding the plan with a long-term investment portfolio. I believe doing all this in addition to the other services that we take care of for our clients (tax planning, risk management, comprehensive estate planning, etc.) works out to be about 20% of the total value we provide.
The other 80% of our value is to coach clients to continue working the plan through all the cycles of the economy and all the fads and fears of a lifetime of investing. Essentially, being the circuit breaker between one’s emotions and actions. We support our clients to prevent acting on their emotions which could result in blowing up the carefully crafted lifetime financial plan.
Consider the following quote that is helpful in this regard:
“Those who judge their portfolio by its performance relative to some narrow benchmark are focusing on an issue that is largely irrelevant to their ultimate financial success. The only benchmark that you should care about is one that indicates whether or not you’re on track to accomplish your financial goals. Risk is measured as the probability that you won’t meet your financial goal. Investing should have the exclusive objective of minimizing this risk.” ~from Adaptive Asset Allocation by Butler, Philbrick, and Gordillo
I would also like to state here what we don’t do. We perform no analyzation or interpretation of the economy or current events. We don’t try to call tops and bottoms in the market and we don’t identify consistently top performing investments. We don’t do these things because nobody can. For example, businesses are having great difficulty right now making informed decisions and plans out of the ever-changing chaos created by the current administration. This creates maximum uncertainty. I promise you nobody knows how or when this is all going to end. I just know it will because it has in the past. For an investor working a lifetime financial plan with an advisor, I feel the best course is for us to ride it out together.
Setting one’s most cherished financial goals, creating a plan in the effort to achieve them, and then funding the plan with appropriate investments has historically been the best way to success.
If you are curious and/or ready to talk about the value I can bring as your financial advisor, please reach out.