Years ago, as a stockbroker at a major brokerage firm, my job was straightforward: offer stock recommendations and hot tips. Clients came to me asking, “Where’s the best place to put my money right now?” With minimal context, I could easily direct them into investments that seemed (possibly) perfect for them and earned a nice commission for me. Back then, it wasn’t about financial advice; it was about instant gratification.
These days, you’re shortchanging yourself if you focus only on investments. Your financial life is more complex, and many financial advisers offer more than just investment advice. You should be receiving qualified financial advice that involves all aspects of your life.
This is where investors and advisers are not always aligned. A Morningstar survey asked both groups to rank the importance of 15 adviser attributes. Investors tended to focus on traditional services, such as generating investment returns, and undervalued the arguably more valuable interpersonal services that advisers offer.
For example, most investors ranked “Helps me stay in control of my emotions” last, despite research showing that advisers acting as behavioral coaches is one of the most impactful services. This lack of appreciation for personalization and behavioral coaching can lead to missed opportunities for increasing overall wealth.
Fortunately, you can ensure that you’re not missing out. By understanding what a good adviser should provide and actively seeking those qualities, you can find the help you need and more. Here’s how.
Understand the limitations of traditional advice
In the past, a typical conversation with a financial adviser would go something like this:
You: How are my returns looking for the year?
Adviser: The market’s been strong, and our bonds have shorter durations. Our portfolios are outperforming the S&P by more than 5%. Let me show you how well we’re doing on the graph we sent you in your quarterly statement and our outlook for the next couple of quarters. Got any questions?
The problem with this approach is that it focuses almost entirely on economic and business cycles, with little consideration for how your personal investment strategy aligns with your lifestyle and aspirations. If 90% of the discussion is about external factors and only 10% on how you feel or envision your lifestyle, that’s a huge miss. After all, you’ve hired an adviser to support your lifestyle and alleviate fears about running out of money during your lifetime. Getting there can mean having to change the conversation — or finding a better adviser.
Set the right expectations
Let’s fast-forward to today, where now it’s the internet that’s the go-to source for hot tips and get-rich-quick investment schemes. People now seek financial advisers because their financial lives have become more layered and complex or because significant life changes require expert guidance. This is where holistic advice comes into play, giving you the opportunity to get more from your adviser and for your adviser to provide more.
The industry has a special term for this added value: “gamma,” a concept designed to quantify the benefits of intelligent financial planning decisions. It involves addressing decisions for a wide range of needs, from helping couples manage money to caring for special needs children, managing stock options, rolling over a 401(k) and preparing for retirement. I call this holistic financial advice, or lifestyle planning.
When you clearly articulate the reasons you want help, you’re setting expectations that can be met.
However, there can be a disconnect between your real motivations and the adviser you hire. Too many financial advisers lack the expertise to provide true holistic advice, focusing only on portfolio performance without considering your family, cash flows, real estate, legacy plans, retirement withdrawal strategies or Roth conversions. Quarterly meetings can become dull and perfunctory, leaving both you and your adviser uninspired.
The solution is to keep your best interests first at all times.
Put your needs first — and make sure your adviser does, too
The key to a truly rewarding adviser relationship is to prioritize your life, fears and aspirations. Having the right adviser is crucial to making this work.
Leslie Gagnon, living in Falmouth, Mass., illustrates this well. Despite her background — her father was a stockbroker and her ex-husband a banker — Leslie felt behind in her financial knowledge. Post-divorce, she prioritized her lifestyle in her advisory meetings, explaining: “Being divorced and feeling like an outsider means I have to put my lifestyle front and center whenever I meet with my adviser — that’s on me. And in my case, I’m lucky to have an adviser who starts every discussion connecting the dots between whatever he’s seeing and doing and how it fortifies my lifestyle.”
Her adviser, Dana Mascalo, CFP®, AAMS®, C(k)P® and Registered Life Planner® from TrinityPoint Wealth, is part of my Wealthramp network of vetted fee-only, fiduciary advisers. Her plan isn’t just built around portfolio returns or tax strategies, but with a deep understanding of her priorities: her children’s financial well-being and her legacy. As she explains, “When I talk to Leslie, it’s always about her lifestyle and priorities first. Each Zoom meeting connects market discussions with how we navigate external changes. It’s vital that Leslie becomes more confident in herself and knows she can count on us as the years go on.”
Your investments play a key role in driving the growth that later becomes your income after you stop working. But as this real-life example shows, a good adviser considers all aspects of your life — family, health, real estate, tax strategies, debt, job security, employee benefits, insurance, estate planning — everything!
You need an adviser who leverages their skills and resources as a tool in order to spend more time listening to you. This is how you truly get your money’s worth from a financial adviser.
