How’s your relationship (with your advisor)?
In many households, spouses divide and conquer responsibilities in an effort to be efficient and fair to each other. For example, one spouse may cook dinner and the other may clean up afterward. However, there’s one task you should be united on: choosing your financial planner.
Sometimes it’s easier to assign this responsibility to one spouse because they have a natural interest or aptitude for personal finance. However, at Snow Creek Wealth Management, we would argue how important it is for both spouses to have a solid relationship with their advisor.
So, how do you choose a financial advisor?
Find a planner who wants to get to know you. Does the future worry you? What are your shared and individual goals? What’s your history with investments, taxes and financial planning? Are you apprehensive about making decisions because of past mistakes? Look for someone you feel a genuine connection to and you are comfortable speaking openly with.
Find a planner who can adjust to your communication style. Are you a visual learner? Do you like having regular in-person meetings or is the occasional phone call sufficient? Do you feel comfortable asking “dumb questions?” Well, you should. As a professional, it’s easy to forget everyone doesn’t understand terms like “standard deviation,” but an advisor should understand how to break down these concepts and ensure everyone is on the same page.
Agree on Risk
Find a planner who understands your definition of risk, which means something different for everyone. Experiences, salary, and general outlook can affect your perception of risk. While it’s the advisor’s role to make informed recommendations on the allocation of your portfolio, it’s also their responsibility to understand what helps you sleep at night.
Find a planner you’d want to stay with should something happen to your spouse. Studies show over 70% of women leave their financial planner within a year of their spouse passing. This is an amazing number and generally comes from the spouse not feeling welcomed into the conversation by the advisor. It may seem easier to build a relationship with a new financial advisor rather than fix a broken one. The loss of a spouse is a stressful event, to say the least. During difficult times, your financial advisor can be a trusted part of your support system, not an additional stressor.
At the end of the day, it’s your life and your money. We want to encourage each of you to get involved in the management of your money at some level. Having a longstanding relationship with your financial advisor can help you reach your goals better in the long run and help smooth out times of trouble.