Advertisement
Financial Planning

Baring Your Finances to Your Adviser

That's what it could feel like for some folks, and it could stop them from seeking retirement help. Financial advisers need to put themselves in their clients' shoes to appreciate the other side of the process.

Next to one’s health, perhaps nothing is so private as one’s financial circumstances, and that can cause a problem for people who just can’t open up and ask for the help they need to make a secure retirement plan.

For many people, the reluctance to engage a financial adviser may be due to fear or embarrassment. These emotions take many forms, but here are a few:

Advertisement - Article continues below
  • Fear of making a mistake
  • Reluctance to admit to having done a poor job doing it themselves
  • Fear of looking foolish

Over the course of my two decades as an adviser I’ve met lots of otherwise successful people who have done a poor job of managing their finances. Some struggled because of inattention while trying to do it themselves, others had bad experiences with unscrupulous or commission-motivated advisers.

As advisers, we must face the fact that our profession suffers from a perceived lack of integrity. A 2016 Gallup poll rated stockbrokers in the bottom third of professions in terms of trust, only slightly above car sellers and politicians. It doesn’t help that some of Wall Street’s largest firms have resisted efforts to broaden the fiduciary standard of care to include all adviser-client relationships.

Advisers should think about how prospective clients feel and take steps to make it easier for consumers to seek professional advice. Let’s face it, an initial meeting with a financial adviser is akin to “financially disrobing” in front of someone they hardly know.

Advertisement
Advertisement - Article continues below
Advertisement - Article continues below

Here are some tips for both advisers and consumers on how to create an atmosphere that can help overcome the reluctance some may have in working with an adviser.

For advisers:

  • Offer complimentary consultations that add value, even if the person isn’t a great fit for you. That value can be as simple as referring them to another capable adviser or providing them with notes from your meeting that outline key areas that they need to address.
  • Be transparent about fees and services offered. Think about shopping for a new TV. Think about the confusion one would experience if the price weren’t listed on the display wall. Not knowing what something costs creates anxiety and initial lack of trust. In addition, far too many advisers market themselves as “financial planners” but lack the CFP credential.

For consumers:

  • Do your homework. The CFP Board and NAPFA offer valuable guides that help educate and inform consumers about how to seek an adviser.
  • Take ownership. Not sure where to start? Your public library can suggest books on personal finance (here are a few of my favorites), and many community colleges offer personal finance classes as part of their lifelong learning mission. Investing time to get an understanding of the basics helps make for a savvy consumer.

Remember, it’s never the wrong time to do that right thing. The journey to financial independence begins with a step.

About the Author

Mike Palmer, CFP

Managing Principal, Ark Royal Wealth Management

Mike Palmer has over 25 years of experience helping successful people make smart decisions about money. He is a graduate of the University of North Carolina at Chapel Hill and is a CERTIFIED FINANCIAL PLANNER™ professional. Mr. Palmer is a member of several professional organizations, including the National Association of Personal Financial Advisors (NAPFA) and past member of the TIAA-CREF Board of Advisors.

Advertisement

Most Popular

12 Tax Deadlines for July 15 (It's Not Just the Due Date for Your Tax Return)
tax deadline

12 Tax Deadlines for July 15 (It's Not Just the Due Date for Your Tax Return)

Between due dates for IRA or HSA contributions, paying estimated taxes and other deadlines, there's more to do by July 15 than just filing your federa…
July 10, 2020
65 Best Dividend Stocks You Can Count On
stocks

65 Best Dividend Stocks You Can Count On

These 65 Dividend Aristocrats are an elite group of dividend stocks that have reliably increased their annual payouts every year for at least a quarte…
July 8, 2020
Know Why Your Credit Score Changes: 9 Money Moves to Consider
credit & debt

Know Why Your Credit Score Changes: 9 Money Moves to Consider

Your credit score is a key indicator of your financial well-being and of the risk you pose to lenders. How good is yours?
July 10, 2020

Recommended

Saver's Credit: A Retirement Tax Break for the Middle Class
Tax Breaks

Saver's Credit: A Retirement Tax Break for the Middle Class

Your retirement contributions could be the key to a lower tax bill.
July 9, 2020
Avoid Blindly Following Random Benchmarks on the Road to Retirement
retirement planning

Avoid Blindly Following Random Benchmarks on the Road to Retirement

Unless the benchmark is relevant to your personal plan, it could steer you into taking a wrong turn.
July 8, 2020
Where Should You Retire?
retirement planning

Where Should You Retire?

This week, our Your Money's Worth podcast host Ryan Ermey interviews co-host Sandy Block about her recent story about the best retirement destinations…
July 7, 2020
Find a Great Place to Retire
happy retirement

Find a Great Place to Retire

Our cities provide plenty of space to spread out without skimping on health care or other amenities.
July 2, 2020