Second in a Series
May 2, 2012, Wilmington, NC – There’s a popular commercial that shows a patient going into their doctor’s office. They wait a while for the doctor to enter. When he finally does, he asks, “Do you have any questions?” and then there is silence. Pure silence. No answer back.
Unfortunately, that’s the way it is with many people and their money.
Perhaps, they don’t know the financial questions to ask.
Perhaps, they are afraid or embarassed to ask the questions they do have.
Perhaps, they think that unless they have a shipload of money, they aren’t in need of a financial planner. Perhaps, all three.
Regardless, asking the money questions we don’t know may be the most important task of all.
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A Good Financial Advisor Is A Mentor and Advocate
The word “advisor” came about in the early 1600s, and originally meant “a military person sent to help a government or army in a foreign country.” So we see elements of the modern meaning of the word – a person who brings expert advice “to the trenches,” and provides a perspective that may not be readily apparent.
A true advisor takes a big-picture view and gives people suggestions and recommendations that are seeped in reality, and backed by data. Often the questions an advisor asks are quite necessary, but perhaps questions that one is denying (or just not seeing for one reason or another).
That leads us to another similar word: mentor. The word “mentor” – which also describes a good financial planner – comes from the Greek. A person named Mentor was a friend of Odysseus and an advisor of Telemachus, with his name literally meaning “intent, purpose, spirit, passion” (mentos) – “one who thinks, one who admonishes.”
Finally, a good financial planner is an advocate. This word appeared in the mid 14th century as “one who pleads cases,” and orginates from the Roman word “advocat,” – a “barrister, spokesman, one called to aid.” It’s true; a good financial planner helps another person by offering their money expertise, as well as their compassion – while being very direct.
Real Financial Questions Cut Across All Generations
A good financial advisor – one who can help you manage your portfolio, secure tax free income, and provide ideas on how to fund your son’s or daughter’s education – should have great interviewing and rapport building skills.
Given that a financial advisor has the experience and education necessary to practice, he/she must excel at getting people to talk and to answer the tough questions that will point the way to a custom financial plan that performs well.
He/she must develop trust and confidence in his/her advice and recommendations through careful, honest fact-finding questions – and true conversation. Much like a patient, a person must experience firsthand – over time – how an advisor has his/her best interests at heart.
A good financial advisor will not leave the hard questions unasked. They will not shrink away from the crux of a matter. In looking at critical illness and long term care, for example, a true advisor will ask straight out: “Are you able to care for yourself? or “Is your mom able to care for herself?”
If not, what are the options and how much do they cost? And, how can you start saving for whatever needs may arise in retirement – even if you’re on a tight budget right now?
Real Financial Questions Are About Life, Not Death
Much the same, there are quite a few “financial planners” who operate like life insurance sales reps. It’s true that life insurance can be a smart choice in certain financial situations, however a good financial advisor will be interested in using life insurance as a tool to aid a client’s overall tax free retirement planning and estate liquidity planning.
In looking at retirement, for example, the core question is not “how much do I need for retirement?” but rather: “What kind of lifestyle do I wish to enjoy in my later years?” The emphasis is on living. Life insurance thus becomes a way to provide money for one’s life – not just a benefit for one’s loved ones when death occurs.
So, here it is. The tough question for today: “What are you doing right now to provide a cushion for you and your family?”
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Let’s talk. Looking at money differently – and challenging you to do the same – is my specialty. Call me today at (910) 367-5497 to get started, or to re-assess your current situation and investments.
View other articles in Peter Starr’s “How Does Money Really Work” Series.