Why Your Financial Professionals Should Work Together
If you have a financial adviser, an accountant and an attorney, they should communicate with each other to help design your best financial strategy.
If you've already managed to set yourself up with financial professionals you trust—a competent investment adviser, an accountant and an attorney—congratulations. You're way ahead of most people when it comes to planning your future.
Unfortunately, you may still not be where you need to be.
Even if those advisers are very good at what they do, if they aren't talking to each other and connecting on your behalf, you're probably not getting the most from your team.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Instead, picture yourself at the center of a sturdy triangle.
At the top, there is a top-notch investment adviser—someone who does more than just transactions, who understands income planning and how taxes can impact your money long-term.
At the bottom left is a trusted accountant who not only does tax preparation, but also is truly knowledgeable about tax planning. There is a difference. While tax preparation happens once a year during tax time, tax planning happens year round. Typically things happen throughout the year that will affect the amount you have to pay in taxes come April. The goal is to reduce the amount of taxes paid by making deliberate choices throughout the year.
And at the bottom right, there's an attorney who can make sure your legal house is in order and you have the proper will or trust in place. Proper estate planning is critical, even though we find it rarely makes it to the top of anyone's to-do list.
There are those who shut down as soon as you use the term "estate." They say, "I don't have an estate; Bill Gates has an estate." In reality, everyone has an estate; they are just different sizes. Who's responsible for yours? You are.
All the corners of the financial triangle should connect to form a strong team. Even if you are working with each of these professionals, they may not be actively communicating with one another. When this is the case, the right hand doesn't know what the left hand is doing, and that can be to your detriment.
When I get together with clients or prospective clients, along with their accountants and attorneys, we each bring our knowledge to the table, and the clients are amazed. Prospective clients often become clients soon after these meetings because someone may have never brought these three important professionals together to form a comprehensive retirement plan for them.
Some advisers feel that if they teach their clients too much, those clients won't need them anymore. I find it to be the exact opposite. The more I educate them, the more value I bring to them.
I always ask people the seven questions every investor should know about their investments:
- Why do you have each investment?
- How do they work?
- Do you know what you're invested in?
- What fees are you paying?
- What are the tax advantages or disadvantages to each investment?
- What income might you expect from each investment either now or in the future?
- What is your exit strategy?
When I ask these questions, I get the same three-word response every time: I don't know.
You should know. This is your future. Your retirement. Your legacy.
Put yourself in the center of a financial triangle and set yourself on the path to financial independence!
Jeff Dixson is the founder, president and CEO of Northwest Financial and Tax Solutions, Inc. He hosts a weekly radio show, "The Jeff Dixson Show: The Retirement Coach," and is the author of "Winning the Retirement Game." As a financial adviser and insurance professional, Dixson believes in preservation of principal and using strategic financial vehicles to generate growth and income.
Securities offered through Madison Avenue Securities, LLC (MAS), member FINRA & SIPC. MAS and Northwest Financial & Tax Solutions are not affiliated companies.
Kim Franke-Folstad contributed to this article.
-
Dow Dives 870 Points on Overseas Affairs: Stock Market TodayFiscal policy in the Far East and foreign policy in the near west send markets all over the world into a selling frenzy.
-
Quiz: Understanding Roth ConversionsQuiz Discover if a Roth conversion is the right move for you by taking our quick quiz.
-
How Prices Have Changed in Trump's First YearTrump campaigned on bringing prices down for Americans. Here's where prices stand one year into his second term.
-
Beyond the Bar: Your 5-Step Guide to Discovering Whether a Lawyer Is ShadyResearch shows you can't rely on some state bar websites to vet a lawyer you're considering hiring. Here's how to check out a lawyer before you hire.
-
6 Practical Steps to Help Keep Your Student Focused on College Rather Than the Financial StrainToo many students drop out due to financial strain. This plan can help families plan for the costs and get timely aid that sees students through to graduation.
-
Are You the Doer or the Visionary of Your Advisory Practice? Here's How You Can Make the Leap to Chief Vision OfficerThe key is to transition from a tactical "doer" to a strategic "chief vision officer" by building the teams, processes and brand so your practice can grow.
-
You've Heard It Before, But This Investment Advice Still Pays Off"Time in the market beats timing the market" — been there, done that, right? But don't write off the underlying advice. There's a reason it's a popular saying.
-
Are Clients Asking About Adding Crypto to Their Retirement Plans? This Is How Advisers Can Approach This New 401(k) FrontierAdvisers need to establish clear frameworks to address client interest, navigate risks like volatility, and ensure they meet their fiduciary responsibilities.
-
3 Niche Oil and Gas Investments for Next-Gen Wealth BuildersLesser-known segments of the oil and gas sector present unique opportunities for next-gen investors and family offices, as long as they're vetted thoroughly.
-
How to Avoid Being Buried by the Tax Avalanche in Retirement: Tips From a Wealth AdviserAll that cash you have in tax-deferred accounts could launch you into a higher tax bracket when you start withdrawals. It's time to protect your income.
-
I'm a Financial Adviser: This Is the Real Secret to Retirement SuccessFor real retirement security, forget about chasing returns and focus instead on the things you can control: income, taxes, risk-taking and decision-making.
