QUESTION:

What does a financial advisor do?

Short answer:

A financial advisor helps clients achieve financial goals.

Long answer:

A financial advisor works with individuals and families to identify financial goals, develop a customize plan to achieve success. Acting as a long-term, trusted partner, an advisor provides regular guidance and behavior coaching, monitors progress, and adjusts the plan as necessary.

Furthermore, a true master of the profession should be skilled enough to speak proficiently on the seven key areas of personal wealth, detailed below:

Financial Position: Review of assets/liabilities and cash flow. Determine appropriate level of cash reserves, asset diversification, and efficient debt management.

Risk Management: Evaluate insurance risks, needs, and coverage in the areas of life, disability, and long-term care.

Investments & Education: Review current investment program and recommend strategies to help clients reach long-term goals and manage risk.

Taxes: Review current tax returns and identify opportunities to improve tax management and after-tax investment return.

Retirement: Review retirement plan needs and develop a strategy to assist in reaching goals. Also offer a review of employer provided benefit plans, tax deferred savings programs, and social security strategies.

Estate Planning: Discussion of strategies to minimize probate cost, estate taxes, and provide for the timely transfer of assets to beneficiaries.

Beneficiary Directory®: Implement a system to help clients identify and organize important documents that may be needed in the future for guidance in the event of a disability, death, or long-term care need.

A financial advisor may address all, some, or one area of personal wealth, depending on the specific client situation and goals.  However, regardless of the agreed upon scope of interaction, be aware of a professional’s knowledge and skillset. While many utilize the title of “financial advisor,” ask questions and remain cautious – not all “financial advisors” are created equal.

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