Managing the financial aspect of life takes brainpower and a lot of time: staying updated on the markets, tracking changes in tax law, and reading the fine print are just a few examples. Whether you are busy managing a business, juggling family life, or simply enjoying retirement, these tasks–and the financial responsibility that comes with them–require a team effort. That is where a financial advisor steps in.
To be an advisor is to be in the business of financial peace of mind. The following framework, called the 4-C’s , highlights the characteristics of a great advisor: Competence, Coaching, Convenience, and Continuity. Let’s dive in.
Characteristic #1: Competence
In your words: “I need help, I don’t really know what I’m doing.”
A great advisor will be able to listen to a problem like the one above, “I need help,” and address it with competence, full stop. You will recognize a competent advisor by way of a few qualities:
They will be aware of and invested in your personal financial goals
They will have deep knowledge of the markets, taxes, insurance and how they affect your personal situation
They will have emotional intelligence; finances are just as much about managing emotions as they are managing assets
At Wealthstream, our clients are highly capable of understanding their financial situation from a 30,000-foot level. Often, they lean on us because they recognize that technical competence plays a vital role. Our team of credentialed advisors has the knowledge to tackle the complex and high-stakes decisions that come with handling someone’s personal finances.
Characteristic #2: Coaching
In your words: “I would like for somebody to keep me in check and stay objective.”
To effectively manage personal wealth takes discipline, organization, and common sense.
We don’t need to tell those who have spent time in the financial world how much markets play into – and react to – investors’ emotions. A bad day for the S&P 500 will show this just as much as a market high. When it is your money that's involved, it’s particularly challenging to remain objective. For financial advisors, objectivity is the name of the game. Coaching clients to approach decisions with a level head will lead to better results for them down the road.
While we spend considerable time coaching our clients on spending, saving, and investing, this only scratches the surface. As fiduciary advisors, we are required to act in their best interest. It may not be what the client wants to hear, but we give objective feedback and set realistic expectations. We pinpoint the emotions, biases, and stressors related to important financial decisions. Through behavioural coaching, our clients gain confidence in their decision-making and are able to maintain peace of mind in good times and bad.
Characteristic # 3: Convenience
In your words: “I don’t want to spend time on this.”
Sometimes, the benefits of a great advisor are simple: you just need someone to do it for you. This becomes especially true if personal finance or investing is not a passion of yours.
Convenience, the third C, is tricky: you can find convenient help almost anywhere. But for that convenience to contribute to your overall financial plan and peace of mind, you’ll need to look a little deeper. You should have:
Regularly scheduled check-ins on your financial plan to understand how it is affected by the current state of the market
Regular and consistent communication
An understanding of your goals so that your advisor can work independently while you focus on things you care about most
Our clients are busy. As their careers mature and families grow, their free time disappears and finances escalate in complexity. The convenience of having an advisor enables them to take a step back from these responsibilities and focus on what they really enjoy.
Characteristic #4: Continuity
In your words: “I want tomake sure my family knows what to do when I am gone.”
Many people wish to set their families up for financial success down the road. Family continuity is a noble prerogative, and one that your advisor should be able to help you plan for.
Financial planning already requires a long view but managing wealth for family continuity requires additional finesse. If you’re planning with your partner in mind, your advisor should be able to work with you both to form joint objectives. If your financial planning will span multiple generations – whether that involves setting up trusts, managing college funds, accumulating assets for loved ones, etc. – your advisor should be able to map out a plan with a long-term view.
Our clients have worked hard to save and invest throughout their lives and many have the opportunity to pass down their wealth. Guiding them through emotional decisions regarding their legacy is crucial. Helping our clients achieve their multigenerational planning goals gives them peace of mind that their loved ones will benefit for years to come.
Achieve financial peace of mind this year. Reach out to us at Wealthstream Advisors any time: we’re here to help.