Choosing an Advisor: It’s a Personal ThingSubmitted by Stone House Investment Management, LLC on October 23rd, 2016
submitted by Robert J. Brown
October is National Financial Planning Month. This fall, take some time to evaluate whether you are prepared for your financial future. While you may be unable to control what life throws your way, you can control whom you have on your side to help navigate your way through. The following is a message from Stone House Investment Management, LLC Director of Financial Planning/Senior Advisor/Partner, Robert J. Brown.
When I started in the financial industry, about two decades ago, people were tired of being ‘sold’ insurance products. As market investments were gaining popularity, the media attention made viewers want a piece of the action, in the form of a 401(k), IRA, stocks, bonds, etc. My job was focused largely on helping those find the right way to invest their money: mutual funds, stocks, bonds, IRA or taxable, etc. As time went by, the industry evolved and our focus shifted to selecting what we thought were the best funds and investments available. As several major stock market corrections caused all of us to pay even more attention to the details, such as fees, exposure, risk, volatility, etc., again, I had to make sure that my clients were investing their money into some of the best investment options available to them. The funny thing about financial products is that they consistently evolve to meet the demand of investors. The methods that worked years ago may not necessarily be your best investment strategy today. For example, when I started over twenty years ago, Mutual Funds were the new great thing. Today, they are being challenged and over taken by Exchange-Traded Funds (ETFs) which have since become the most popular investment vehicle for our clients’ portfolios.
The role of a Financial Advisor is shifting again today, as interest rates are still sitting near record lows and the hunger for safe and consistent income paying investments is ever growing. Those investors who have weathered those market corrections of the past now see the challenges ahead and the very real possibility of outliving your money. Now that the evolution of the financial industry has allowed technology to bring so much more to our fingertips, there is a greater responsibility on the shoulder of financial planners and advisors than ever before. The days of gaining special access for our clients into various investments is morphing into more of a coordination of efforts and a fiduciary responsibility to do for our clients as we do for ourselves. Isn’t that the way it should have always been?
Clients are very politely telling their financial advisors to “shut up and listen”! They want us to help them live within their means, manage their risk and, maybe most importantly, let them spend their time on what is important to them and not on percentages, expenses, returns, taxes and money management.
So what is important to our clients? We have recently made a point of asking them. Their answers are not what you learn about in financial books, or draw up in a plan. Each client is different to an extent, but the one commonality they all have is that their priority list is based on what life has dealt them. On one hand, we will have a client who is finally selling their business and, for the first time, they have the ability to walk away and fill their calendar with stuff they want to do, as opposed to what their customers needed them to do. On the other hand, we will have a client who will not be able to do all of the things they he/she has dreamed about because they have recently lost their spouse or need to care for a family member. We have clients who need to help their aging parents stay in their home or possibly move to an assisted living facility. Others who have been named executor of an estate and could use our help sorting through it all. Some are trying to get their own affairs in order, so their kids will not argue about things when they are gone. Many have questions about their Social Security benefits, or planning for health care, today and in the future.
Here is my point: Choosing an advisor or advisory firm used to be so that you could have a way to invest. Now it is really about hiring your own personal Chief Financial Officer, someone who is an extension of yourself, a person or team that understands what is important to you, not to them. Your financial future should not fulfill a firm’s bottom line. A true advisor is one who listens to you, empathizes, and then makes suggestions as to how you might be able to best navigate through whatever life puts in your path. Life throws us curve balls all the time, the right choice in this category could mean more confidence for you and your family, a smoother retirement, and piece of mind. Take your time, do your homework and choose wisely!
At Stone House, our team is your team!