The Financial Planner Relationship is a Fragile One
Do you cheat on your financial planner?
The economic fallout of the past several years sent numerous Americans into the arms of financial planners to seek navigational help toward a prosperous future.
Just showing up isn't enough. You must reconsider all aspects of money in your life, be honest in assessing your habits and sincere about getting your act together.
Most of all, you must listen and act accordingly. Bullying a planner, disregarding advice or fixating on the day's financial news is a road to nowhere. Interviews with certified financial planners around the country indicate the types -- and even occupations -- of the clients who most try their souls.
"The thorny personalities of people in high-powered positions, such as super-successful entrepreneurs or surgeons, is something I've dealt with over the years," explained
Once such controlling types realize you aren't afraid, they start to listen, gradually realize you are adding value and can be transformed into terrific clients, he said.
"We find that some clients, especially 'super left-brain' engineers, tell you they respect your opinion, and yet they micromanage you to death on every recommendation, every decision," said
Either trust your advisor or find someone else, she suggests. Surprisingly, her firm made a team decision not to bring on new clients who are engineers. While she acknowledges that decision "sounds quite extreme," endless micromanagement is poor use of a planner's time.
"I have had clients who are glued to the daily financial news, which they let influence their emotions to the point where it is what drives all of their financial decisions," said
In her client orientation, she tries to "inoculate" them against emotional decision-making and explain how they're likely to feel during various steps of investing. Some still can't get over the angst of the moment.
"There are clients who are motivated totally by investments and their returns, equating that with financial planning," added Dimitroff. "They don't realize you can have a great investment portfolio, but if you don't have insurance or your spending is way out of line, it's no good."
People at all income levels fall far short of meeting long-term retirement goals, she has seen, because they under-save and overspend.
"There are clients who have unrealistic expectations and who assume my role is to get them returns on their investments that no one else can get them," related Evensky. "I tell them I don't have special drawers for special clients or any secrets, and my job is to help provide a reasonable growth rate for the wealth they have."
On rare occasions, he has lost clients that he "shouldn't have accepted in the first place," he said. Their expectations were far greater than anything anyone could consistently deliver.
"Some clients are unable to stick with long-term planning," he added. "If a client bails out at the bottom of the market, then we've failed and they've failed, so it is important to discover early on their threshold of pain about investments."
The best financial planner or financial plan means nothing if disregarded. Lip service doesn't mean much when your financial future hangs in the balance.
"There are clients who believe you are professional and value your recommendations, yet they never follow through with your recommendations," noted Zohlen. "Some clients simply spend much more than their resources can sustain, which very early on we try to work with the client to change."
The older that clients get and the further into retirement they are, the more sensitive they become about whether they will outlive their money, she added. Suddenly they're 75 years old, and 80 isn't so far away, she noted. Meanwhile, younger clients who have become financially responsible for a parent or grandparent who did a poor job of retirement planning want to get their own finances in order so that they don't burden their children in the same way.
"Always get some clarity as to where you're going with your financial planner," explained Zohlen. "Do you want stock-picking advice or an overall financial plan including insurance and investments, and exactly how involved do you want to be?"
One of the first things that Zohlen asks clients is how they want to be contacted -- whether an e-mail is OK or whether they want to be called if the market has a really bad day. She wants to know just how much or how little handholding is required.
Because not being on the same wavelength with your planner can definitely be a hazard to your long-term financial future.
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Personal Finance - The Financial Planner Relationship is a Fragile One
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