Simply Money

Simply Money

Each weeknight at 6pm, Simply Money makes money simple for you. Join hosts Amy Wagner and Steve Sprovach as they share easy-to-understand and...Full Bio


3 ways to get the most value from your advisor

#1: You’re getting the most value from your advisor if they’re providing you with financial planning.

If you ask someone what a financial advisor does, one of the most common responses will be something like: “An advisor picks good investments so that I make money when the markets go up and avoid big losses when the markets go down.”

Yes, advisors should very carefully allocate your savings to maximize upside and minimize downside.But no one can predict the markets.So, don’t choose an advisor who brags about their stock picking acumen.

Newsflash! Your advisor should spend as much or more time talking about your holistic financial situation as he or she does about your investments.

But just what does financial planning entail?

It looks at your entire financial situation, then considers your long-term objectives for lifestyle and security, then combines those to build you a detailed savings and investment strategy that will help you achieve your goals.

Financial planning includes things like using saved investments to time the pay-off of your mortgage, along with calculating realistic withdrawal strategies for your retirement accounts, but it also looks at things like budgeting, cash flow, debt management, and making beneficial insurance and estate planning recommendations.

Yes, it’s a big deal.

And, if it’s not currently part of your professional relationship with your advisor, you need to start asking some questions.

#2: You’re getting the most value from your advisor if they are providing you with tax planning recommendations.

Somehow, tax planning has become the Rodney Dangerfield of advising, as in, it “don’t get no respect.”

That’s because it’s perceived by many as just filing this year’s taxes.

But it really has little to do with how you file your tax return.

Our advisors offer tax planning recommendations (make sure you speak with your accountant about your unique tax situation), but you should consider forward-thinking tax planning as an important part of preserving your wealth.

Because, the fact is, that the more kinds of assets you have? The more ways there are to save on future taxes. (But only if you plan, sometimes years in advance.) 

Forward-thinking tax planning strategies should be able to improve your annual returns and help you hang on to more of your money. These include things like determining which assets to hold in qualified versus non-qualified accounts, Roth conversions, and tax-loss harvesting, just to name a few. 

And qualified advisors who provide pre-emptive tax planning recommendations can work with your accountant to take what your financial situation is today, and what it is likely to be years from now, and then use that information to plan tax approaches and withdrawal strategies that can save you serious money year after year after year.   

#3: You’re more likely to get the most value from your advisor if they help you avoid emotional decision making.

Emotion? Oh, ye wretched wrecker of retirement dreams!

If there’s one thing an advisor can do that stands out above the rest, it’s accounting for behavioral finance and steering you clear of the emotional minefield that can absolutely ruin your financial situation.

Think back to the financial crisis. 2008 and 2009?

The market was plunging, and you could feel panic in the air.

Most listened to us, but some didn’t.

Sure, we reallocated a lot of portfolios. But the most important thing we did, was, generally, to guide our clients through the natural tendency to panic, and, in the process,not onlykept them invested, but helped them emerge better for it on the other side. 

Those people who stayed invested are generally doing exceptionally well right now (especially compared to those who jumped out at the depth of the crisis).

We are human beings and we all have fears. The fear of losing our life savings is certainly not in any way irrational.

But if our almost 30 years of advisory experience has shown us anything, it’s that right at the top of the list of the value we bring to clients is a sense of perspective.

When it comes to money and investing, you want to avoid emotion.  

And, so, you pay an advisor to give you advice. To guide you.

And, typically, and depending on other factors like your age and risk tolerance, advice that accounts for behavioral finance, and which helps you remain dispassionate, is often the very advice that can protect you from making life-altering financial mistakes. 

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