Tag Archives: life planning

The Seven Roles of an Advisor

authorMay 6, 2015
Jim Parker, Vice President
Dimensional Fund Advisors
“Outside the Flags”
What is a financial advisor for? One view is that advisors have unique insights into market direction that give their clients an advantage. But of the many roles a professional advisor should play, soothsayer is not one of them.

The truth is that no one knows what will happen next in investment markets. And if anyone really did have a working crystal ball, it is unlikely they would be plying their trade as an advisor, broker, analyst, or financial journalist.

Some folks may still think an advisor’s role is to deliver market-beating returns year after year. Generally, those are the same people who believe good advice equates to making accurate forecasts.

But in reality, the value a professional advisor brings is not dependent on the state of markets. Indeed, their value can be even more evident when volatility and emotions are running high.

The best of this new breed play multiple and nuanced roles with their clients, beginning with the needs, risk appetites, and circumstances of each individual and irrespective of what is going on in the world.

None of these roles involve making forecasts about markets or economies. Instead, the roles combine technical expertise with an understanding of how money issues intersect with the rest of people’s complex lives.

Indeed, there are at least seven hats an advisor can wear to help clients without ever once having to look into a crystal ball:

  1. The Expert: Now, more than ever, investors need advisors who can provide client-centered expertise in assessing the state of their finances and developing risk-aware strategies to help them meet their goals.
  2. The Independent Voice: The global financial turmoil of recent years demonstrated the value of an independent and objective voice in a world full of product pushers and salespeople.
  3. The Listener: The emotions triggered by financial uncertainty are real. A good advisor will listen to clients’ fears, tease out the issues driving those feelings, and provide practical, long-term answers.
  4. The Teacher: Getting beyond the fear-and-flight phase often is just a matter of teaching investors about risk and return, diversification, the role of asset allocation, and the virtue of discipline.
  5. The Architect: Once these lessons are understood, the advisor becomes an architect, building a long-term wealth management strategy that matches each person’s risk appetites and lifetime goals.
  6. The Coach: Even when the strategy is in place, doubts and fears inevitably arise. At this point, the advisor becomes a coach, reinforcing first principles and keeping the client on track.
  7. The Guardian: Beyond these experiences is a long-term role for the advisor as a kind of lighthouse keeper, scanning the horizon for issues that may affect the client and keeping them informed.

These are just seven valuable roles an advisor can play in understanding and responding to clients’ whole-of-life needs, which are a world away from the old notions of selling product off the shelf or making forecasts.

For instance, a person may first seek out an advisor purely because of their role as an expert. But once those credentials are established, the main value of the advisor, in the client’s eyes, may be as an independent voice.

Knowing the advisor is independent—and not plugging product—can lead the client to trust the advisor as a listener or sounding board, someone to whom they can share their greatest hopes and fears.

From this point, the listener can become the teacher, architect, coach, and, ultimately, the guardian. Just as people’s needs and circumstances change over time, the nature of the advice service evolves.

These are all valuable roles in their own right and are not dependent on outside forces such as the state of the investment markets or the point of the economic cycle.

However you characterize these various roles, good financial advice ultimately is defined by the patient building of a long-term relationship founded on the values of trust and independence and knowledge of each individual.

Now, how can you put a price on that?

saute image ckCharles Kochel founded Yield Wealth Management to help people and foundations invest and do good. To learn more about Yield Wealth or set a time to visit email info@yieldwealth.com.

This blog is not to be used for investment advice.

How We Own * What We Own

The family farm is worth much more than just money. She’s a legacy, rich with tradition and history. Our hope is to pass that legacy down to loved ones, one generation after the next, in the most prudent way possible.
The family structure or how we own what we own is paramount to the success of a family’s financial plan. How you own what you own is the foundation of this plan. We should also be mindful of minimizing or eliminating, to the extent possible, unnecessary income and estate taxes, while not sacrificing income or control to the senior members of the family. This structure should also incorporate protection from unforeseeable liabilities, such as bankruptcies, lawsuits and divorce.
Organizational structure is one of the most important and overlooked aspects of a financial plan. How we own what we own determines how your assets are disposed of during your life and after. If you have not recently (within 3 years or life event) reviewed your beneficiaries and account titles, the time is now.

Who Are You?

who are you?When asked, “Who are you?” What is your answer? Most people answer according to how the world see’s them. This usually consist of their occupation and where they live. “I am a farmer from the Arkansas delta.” “I am a mom, raising two young children, and I live in Santa Monica.”

Who you are is found deep at your core, in your soul. The sum of your talents, creativity, dreams and fears, not your job and where you live. It is all the qualities that are uniquely yours.

If you are not living a life authentic to your true self, feeling incomplete and saying to yourself, “Surely, there is more to life than this? It may be time to start living your dream.

follow your dreamsWe are all struggling to find out who we truly are and nobody but you can define this. For me, as a financial advisor, this is the first step to learning more about what matters most to you, where you want to go in life.

When you have some sort of understanding about who you are and where you want to go in life, and then work to develop a road map and conquest your dreams.

 

 

Charles Kochel, Image“Mindful Wealth Management” written by Charles Kochel, Wealth Advisor at Yield Wealth Management. The purpose of this weekly Blog is to communicate the principles of good Financial Planning and Investment Management based on what matters most to you.