What Is It Like To Work With A Financial Advisor?

One of my good friends and colleagues, Treyton DeVore, posted a statistic on LinkedIn the other day that is astounding. It stated, “45% of U.S. adults say they’d rather visit the dentist than make an appointment with a financial advisor (AARP survey).” This shocks me because we all know much people hate going to the dentist. As a financial advisor, I can promise you that meeting with a good financial advisor is nothing like getting your teeth pulled. It’s quite the opposite.

After reading this statistic, I took a minute to think about why this would be the case for so many people — and I came to the conclusion that the main reason people feel this way about meeting with a financial advisor is that most people do not understand nor have they experienced what it is like to work with a great financial advisor. People assume that they are going to be shamed for past mistakes, told to reduce their standard of living and to invest every extra penny they have. However, that’s not what it’s like in the slightest.

In this post, I am going to shed some light on what it is like to work with a financial advisor as well as what the process is like in hopes that after seeing and understanding the process, you realize that meeting with a financial advisor really isn’t that scary at all.

What is it like to work with a financial advisor?

It is often believed that a financial advisor simply manages investments for his/her clients — but in reality, the industry has shifted a ton. The goal now is to take each client through a process that helps them understand and envision the life they truly want. Once that is done, the advisor can then help figure out how to put all the financial pieces together to inch the client towards achieving their dream life. That is the whole goal of the process; to help people live the life they’ve always imagined for themselves — not to make people scale back on their lives and only focus on savings. Financial planning is all about helping people efficiently use their resources to live their desired lives. I mean think about it, that is why we work right? To create our ideal lives.

It’s important to note that once the advisor and client go through this process, then and only then can the advisor start coming up with solutions to help the client achieve their goals in the most efficient manner.

Here are some of the topics/ways advisors commonly help their clients with:

1. Cash Flow Management

Advisors help their clients automate their cash flow, plan for irregular commissions and expenses, and ultimately create more efficiency with where each dollar is going. On top of that, they help figure out where to cut spending and where to increase it based on the client’s goals and values.

2. Tax Management

Financial advisors may not be CPAs and do your tax filing for you (although some do) but they typically help their clients optimize taxes. CPA’s look at last year and how you can save some money on taxes. Advisors look forward and try and find opportunities to save on taxes over the long term (not just this past year). They look for opportunities to diversify your tax buckets between tax-free, deferred, and taxable as well as take advantage of tax-loss harvesting when the opportunity arises. This is all extremely valuable for business owners, independent contractors, people in tech with stock incentives, and other high paying professionals.

3. Investing

Advisors get to know their clients and their risk tolerance so they can help invest based on their goals. The advisor will help determine which account(s) are most optimal for your situation (joint account, ROTH IRA, traditional IRA, 401(k), etc.) Plus, they will help with portfolio rebalancing to make sure you are staying investing according to your profile.

4. Track Retirement

Advisors will help make sure you are on track for the goals you have. If you are someone that wants to retire at 60 and live off of $7,000 a month, they will figure out what you have to do to make that a reality. Then as life goes on the advisor will make changes to help keep you on track as your timeline, salary, and goals change.

5. Review Insurances

Financial advisors help make sure their clients are properly insured against the biggest risks they face. They will evaluate health insurance, life insurance, disability insurance, property, and casualty, etc. The goal of insurance is not to over-insure, but to make sure these catastrophic risks are accounted for and protected.

6. Hold You Accountable

In my opinion, this is one of the biggest value-adds advisors have for clients. Advisors are the ultimate accountability partner. Back in college, I used to train people (with exercise and nutrition) and found that this is typically what is needed the most. Someone to not only help push you but also to give you some slack when needed.
Advisors help hold their clients accountable and make sure they are doing the things they agreed to do like saving, investing, paying down debt, etc. Let’s face it, life gets busy and we forget to do things. Having someone to keep you on track is so valuable.

7. Help You Feel Confident In Your Decisions While Freeing Up Time For Yourself

In today’s day and age, it can be so hard to make a decision. We have so much information that we take in that it can become paralyzing. An advisor can lay out the options and help you make the right decision for you. Having an expert on your side can be huge in making sure you feel confident and stick with the route you take. This also can be huge in saving you time and anxiety. And while we are on the topic of time, I want to point out that advisors free up a tremendous amount of time for their clients just by doing their job. They do the research, the paperwork, help get everything set up, etc resulting in you getting time back to be with family and live your life.

8. Help Answer Almost All Financial Questions You Have Throughout The Year

Should I buy a house? How much should I put down? What is a fair price we can afford? Should we refinance? How should we pay for this new project: pull out equity, HELOC, or cash?
Should I change or increase my 401(k) contributions? Should I switch to a ROTH? Should I change my contributions higher when my bonus comes?
Do I need any more insurance/any at all?
What should I opt for my company benefits?
Should I invest in Bitcoin or other cryptocurrencies?
I just received a bonus where should I put it?
What is the best way to pay for college?
Should I pay off this debt quicker?
What should I negotiate my new contract to be?
Should I contribute to an HSA? Should I pay for medical expenses this year with it?
Should I exercise this contract and buy more company stock? Should I sell it? How does this concentration of stock affect my overall investing strategy?
My buddy said I should do (buy this, sell that, etc) with my investments. What should I do?
The list goes on and on….

The RLS Financial Planning Process

Now that you understand what a financial advisor does and how they work with their clients, I thought I would share the process we use at RLS with our clients. Every firm does it differently, this is just the process we have found works best with the type of clients we work with.

Step 1: Get To Know

The first part of the planning process is a quick zoom call. In this meeting, we spend time getting to know the prospect and see if what they are looking for is a good fit. We then share our process, how we work with clients, who we do the best work for, and what the fee would be. After that, we part ways and give the prospect time to think and see if this would be a good fit for them.

If we realize they wouldn’t be a good fit for us, we refer them to a different advisor that would. This part is important! We wish we could work with everyone, but we understand we aren’t the best equipped to do so, and if that’s the case everyone is better off if the prospect is working with the right person. The other really important part here is that we won’t sell you anything. I know that feeling of meeting with someone and they instantly try to sell you, that is not us at all. We just want to lay out the facts and then you, the prospect, chooses later whether you want to move forward or not.

Step 2: Financial Planning Meeting

This meeting is all about the prospect. We spend a ton of time getting to know them on a very deep level. We want to know your values, your goals, your dreams, how you see money, how your parents taught you about money, etc. The better we know the client, the better work we can do. To do this, we ask a variety of questions. We have our version of George Kinder’s 3 questions. Then we ask a bunch more open-ended questions to get you thinking and talking.

Once this step is done, we go through all the financials so we can get to work. Sometimes this may take 2 meetings depending on the person’s situation.

Step 3: Plan Delivery

This is where we deliver our first edition of the plan. At RLS, we give all of our clients a one-page financial plan and at the very top of that plan, there is a mission statement that our clients create for themselves. It talks about their dreams, their values, what they want in life, etc., and is the guide for their financial lives.

Additionally, this plan captures all the relevant financial data (net worth, investments, debt, goals, etc) then has a checklist that shows exactly what the client needs to get done over the next year (with our help of course 😌). The goal is to make it simple and easy to follow so our clients can make as much progress as possible towards achieving their most important goals.

Step 4: Implementation

After the clients have had some time to think through, digest, and get their questions answered about the recommendations, we then start to implement them. Maybe it’s starting investment accounts, applying for insurances, getting estate planning documents done, etc. In this step, we start getting all those ‘to do’s’ done. This step does not stop here though. Oftentimes, everything can’t get done that quickly so we have scheduled follow-ups to stay on top of it and make sure all the list items are getting done throughout the year.

Step 5: Review

After all of that is said and done, we meet every year (sometimes even 2+ times a year depending on your situation). In these meetings each year, we get an update of your situation, new goals, life updates, salary changes, etc. then we create a new plan for that year. Additionally, our clients get access to us all year long and can call, text, or email at any time to get their questions answered.

Lastly, throughout the year, our firm will also review investments, tax opportunities, refinancing opportunities, etc to make sure we are doing anything we can to better our clients’ financial situation.

If after reading this blog post, you feel like having a financial advisor would be valuable for you, here is the link to sign up for a Get To Know meeting with me (there is no fee associated with a first meeting 😊).

If you aren’t quite ready for that but are interested in learning more about finance and life, please subscribe to my newsletter. It is the best way to stay up with all the content I put out.

Disclaimer: Nothing on this blog should be considered advice, or recommendations. If you have questions pertaining to your individual situation you should consult your financial advisor. For all of the disclaimers, please see my disclaimers page.