Strait Talk Blog

What Should You Expect From Your Financial Advisor?

Is It Time To Raise Your Expectations?

 

Todd Sixt

Todd Sixt

Chief Executive Officer, Founder

Todd Sixt is the CEO of Strait & Sound. He is a successful and seasoned leader of financial service teams. His focus is to ensure Strait & Sound’s clients are provided with a first-class experience and that the work delivered by our people is unsurpassed in the financial services industry. At his core, he believes in excellence. Todd is deeply committed to helping clients achieve complete financial independence.  

When it comes to working with a financial advisor, there seems to be one universal expectation. It might sound something like this. “Invest my money so I see a good return, but don’t expose me to too much risk.” In fact, some people seem to see investment returns as the universal barometer of the effectiveness of a financial advisor. I take a somewhat different perspective.

Don’t get me wrong. Investment returns are important. Most people in this country won’t realize their financial goals without taking some sort of risk with investments. But far too often I’ve seen families achieve most or all of their financial goals without achieving their financial dreams. What’s the difference? Financial goals are about specific numbers and milestones, liking having a certain amount of money by the time you retire.

But financial dreams are much more complicated than that. This is about where a client’s personal history, family stories, values and even painful experiences from their past all coalesce into a vision for what they want the future to be for them and those they love. I believe you should expect a financial advisor to deeply understand, care about and commit to your financial dreams, right along with you.

 

What Else Should You Expect?

I don’t want to overstate the difference between financial goals and financial dreams. For some clients I’ve served, these two have been almost synonymous. But for other clients, especially those with multi-generational families and complex financial situations, their goals and dreams haven’t always aligned.

This is one reason we offer several different services, like Financial Planning, Investment Management, Retirement Planning, Tax Strategy, Asset Protection, Estate Plan Strategy and Charitable Strategy. I sometimes tend to think of these services like the proverbial story of seven blind people washing an elephant, trying to figure out what it looks like. When we look at your situation through all of these lenses, we get a much clearer picture of your financial goals.

But that doesn’t mean we’ll understand your financial dreams. These services will help us understand your what—what you want to achieve—but they won’t tell us your why—why these goals matter to you and your loved ones. To understand your why, we have to take a different approach. And this gets to the heart of my message.

I believe you should expect your financial advisor not only to care about your what, but also, and maybe most importantly, about your why. This makes it the responsibility of your financial advisor to develop certain qualities in their relationship with you. Here are several qualities that I believe are important.

  • A fiduciary relationship. I believe it’s important for financial advisors to commit to putting your interests at the center of the relationship. This means they act in your best interest at all times.
  • Intimacy. I believe it’s the responsibility of an advisor to get to know you deeply through a formal discovery process that allows you to express your vision for the future and why it matters to you and your family. Great financial advisors get to know you by listening to your stories.
  • A long-term partnership. Most clients will need years of faithful guidance and partnership to achieve their financial dreams. I recommend that you expect to work with a financial advisor for at least a decade, maybe longer.
  • A comprehensive approach. I believe a financial advisor should offer you the set of services you need, based on your unique situation. Achieving your financial dreams will probably require a multitude of services, not just investment services. I believe you should expect a comprehensive service palette that empowers you to achieve your dreams.
  • A strategy to heal the gap. When most of our clients come to us, they tell us about their dreams and then we look at how they are positioned to achieve them. Most of the time, there are some significant gaps between their dreams and the current disposition of their wealth. Great financial advisors put plans in place to heal those gaps. But about every five years or so, they go through that same exercise again because things will likely have changed in your situation.
  • A willingness to work with your other professional advisors. Most of our clients have several professionals they work with besides us: CPA, estate attorney, insurance experts, real estate professionals and even bankers. Effective financial advisors see themselves as being on the same team as these others professionals. Great financial advisors will lead this team on your behalf, saving you a lot of time.

Key Take Away

I BELIEVE YOU SHOULD EXPECT YOUR FINANCIAL ADVISOR TO CARE NOT ONLY ABOUT WHAT YOU WANT TO ACHIEVE BUT ALSO, AND MAYBE MORE IMPORTANTLY, WHY.”

Why Are These Relationship Qualities important?

To help you understand why I believe it’s so important to develop these kinds of relationships with financial advisors, I’d like to tell you some stories. These are true stories based on real-world experiences.

  • Addiction. A couple worked incredibly hard for years to build a successful business. Along the way they had three children. Starting in middle school, their youngest child began to experiment with different substances and eventually succumbed to addiction. This couple was willing to put an outsized portion of their wealth toward helping their child beat addiction. Helping their child get healthy and have a good future became a primary focus of their why.
  • Accidental disinheritance. A man got married, raised a family, sadly divorced and then started a new family. His career success had left him with little time. He wanted to pour far more time into his new family, having learned lessons from his first family. But what he didn’t realize is that the beneficiaries listed on his hefty life insurance policy were his former wife and now grown children. Had he passed away, he would have accidentally disinherited his new family. His why and the disposition of his wealth were not aligned.
  • Outdated estate plans. A successful couple raised four children. They drafted estate documents when their children were in college. Their third-born child passed away in his twenties. Twenty five years later, the husband passed away and the wife had dementia. A review of their estate documents showed that all four children were listed to receive equal splits of the estate. But since the third-born child had passed and the mother had dementia, no one knew how to split the estate. Old grievances opened up between the siblings as they began to fight over the money. This outcome was antithetical to why the parents had worked so hard to build wealth.
  • Terminal disease. A man in his forties suddenly contracted a terminal disease. He was a very successful executive with years of strong personal financial performance. His wife and three children had been his why since his early twenties. As soon as it became clear that his diagnosis was terminal, his focus completely changed. For the next several months, he worked with several different professionals to arrange his financial life to the maximum benefit of his family. But this was often very exhausting and happening between doctor visits, hospital stays and pain medication treatments.

These stories are, unfortunately, far too common. Most of them have little to do with investment returns or even financial goals. But they have everything to do with why these families worked hard, took risk and did their best to achieve their financial dreams.

After having reflected on these and numerous other situations like them, I’ve come to believe that you should expect your financial advisor to be with you on your journey—no matter how it turns out. None of us are in control of the future and life often hands us difficult twists and turns. But you shouldn’t have to face these moments alone.

One of the ways that I bring comfort to my clients is by being present, being available and being a resource to help bear their burdens in some of the most challenging moments they’ll face. The plans that we put in place, the dreams that my clients tell me about—I treasure them. They give me a sense of purpose and a feeling that I’m doing something really important in this big old, often crazy and mixed-up world.

 

Concluding Thoughts

Investment returns are important. Most families in this country won’t be able to achieve their financial goals without healthy investment returns over time. But even if you achieve all of your financial goals, that doesn’t necessarily mean you’ll achieve your financial dreams. I recommend that you expect your financial advisor to deeply understand, care about and commit to your financial dreams, standing side-by-side with you no matter what comes your way.

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