Is Your Advice Good Enough?
In today’s climate of one-page financial plans, bargain-basement fund pricing and automated investment tools, you may wonder whether you need a living, breathing financial adviser.
We think you do, but with a twist. First, we need to redefine traditional financial advice – the kind that’s been delivered by those focused on issuing buy/sell recommendations, executing transactions, making you think they have the best investment product for you, and collecting their commissions. If that’s what you’re thinking of, you are correct. You don’t need that. You probably never did.
As we face continual changes with the markets, Social Security, taxes, etc., the welcome advances we referenced above are best thought of as augmenting rather than replacing the solid advice most investors still sorely need to see their way through to a rewarding retirement.
So, what is “good advice”?
Good advice is timeless … and timely. At its core, good financial advice never goes out of style. Its principles are permanent: It should be consistent and true, and meant for you. At the same time, good advice must remain relevant in an ever-changing world. Your adviser should be able to help you embrace promising new opportunities and insights, while avoiding the false leads and frightening challenges that are as formidable as ever in today’s markets.
Good advice looks at the parts … and the whole. Good financial advice helps you manage your investment portfolio for preserving or increasing your wealth according to your goals. It also helps you plan, implement and manage your myriad related interests: taxes, withdrawal strategies, insurance policies, Social Security, charitable pursuits, real estate, and more. Beyond that, and most importantly, what are your goals? How can we relate your total wealth to your relationships, resources, and your way of life so that it makes sense to you?
Good advice is personalized … and persistent. Good financial advice is essential for making good decisions – not just in general, but for you: your money, your interests, your life. It’s about being in a relationship with an adviser who is there for you, not only during the promising planning stages when everything makes sense, but when your resolve is being sorely tested in turbulent markets, or when your own life’s events have knocked you off course. Good advice helps you find your way when you’ve been sideswiped by the unexpected.
Good advice is wise … and compassionate. Good financial advice is grounded in enduring academic evidence, structured process and informed experience. But for all that, financial advice is nothing if it fails to contribute to that which brings joy to your life, to help you protect the ones you love, and to reassure you in times of trouble. For this, a good adviser must not only advise you; he or she must listen to you. This brings us to our most important point.
Good advice is in your highest financial interests, period. Above all, good advice should always and only be in your highest financial interest. Not every advisor thinks this way, so the financial advice you choose should always call for a “buyer beware” perspective. As Vanguard Group founder John Bogle has wryly observed, “There are few regulations that smart, motivated targets cannot evade.”
We wish it weren’t so. That which best serves investors ultimately best serves their financial advisers as well, so we would warmly welcome a world where good advice reigns supreme. Until then, we hope you’ll be open to good advice when you hear it – the kind that sees you through turbulent times, toward your relevant financial and life goals. If this advice sounds a little different from the status-quo stock tips or market-timing tactics you may be used to hearing, that’s because it is.
Let us know if we may offer you additional advice about good advice.