Many may view the role of a financial advisor as one who has unique insights into the market to give their clients an advantage. However, that belief is far from the truth. An advisor has no way of knowing what will happen next in the investment markets, nor does anybody else. There is no crystal ball or psychic ability involved.
The best financial advisors act in a number of roles for their clients, starting with helping them clarify their needs, wants and concerns and then understanding each client’s individual circumstances. These roles combine technical expertise with an understanding of how money issues relate to your individual life.
There are at least six valuable actions an advisor plays to impact the future success of their client’s life.
#1 Sharing Expertise
Knowing the individual’s financial situation and goals allows the advisor to provide insights on how others have been able to achieve success in similar circumstances. The advisor has the ability to determine strategies to help them attain their goals. The experience of an advisor to share their knowledge is beneficial for a successful plan. Each person’s objective and situation is unique, and the ability to set a plan in place for the future will allow for individual goals to be met.
#2 Being Objective
The turmoil of past years demonstrates the need for an independent financial advisor instead of a product driven salesperson. An independent financial advisor acts as a fiduciary, meaning that they act in your best interest and set aside personal motive or conflicts of interest in favor of pursuing the best outcome for your unique situation.
#3 Listening
There are many emotions that are triggered by uncertainty. What is needed is an advisor who listens to you and provides practical long term answers to your fears. Investing is an emotional journey and the ability to explain and work closely with you on your behavior is of the upmost importance. We work with you to ensure that you stay with your plan during the ups and downs of the market.
#4 Educating
Being able to teach investors about risk and return and the power of diversification and the need to stay disciplined with your plan. Knowledge is power and understanding these concepts is crucial to understanding the process. Once you understand the history of the markets and the benefits of diversification, you will be able to achieve your goals by staying patient and disciplined.
#5 Developing
An advisor needs to build a plan to accomplish your individual needs. Developing this plan with your specific goals in mind will allow for an individual to have a plan that is unique to their circumstances.
#6 Coaching
Keeping you on track with your plan even in times of uncertainty and helping you have the necessary discipline for a successful journey. Working closely together in an on-going partnership will ensure that you are having your needs met. In addition, as your life may change it is important to have a relationship with your financial advisor who can discuss the necessary changes that may be needed to your plan.
As the relationship evolves over time, the roles will build and work with each other. Having an independent and objective voice will enable you to share the journey and lean on the advisor for the long term. And building a trusted relationship is of the upmost importance for a healthy and prosperous journey.
To learn more about Dan Crimmins, view his Paladin Registry profile.