Financial Advice Tailored to You
Tips to make sure you are not getting general “one-size fits all” advice
Professional financial advice targeted toward you, your life and your goals works much better than generalized, scattershot investing tips.
Have you ever received a financial tip or idea that has nothing to do with what you care most about? Many people mean well when they give suggestions when it comes to investments or taxes, for example. However, it’s really hard to give good advice without having at least a partial view of someone’s financial life and background.
Everyone’s investment and financial planning needs defy a one-size-fits-all planning strategy. Financial situations are unique and require personalized, realistic and achievable advice – especially when working with clients from different professions and industries.
I like to ask specific questions about values, background with money, what’s currently keeping someone up at night when it comes to money, and what’s motivating you when it comes to money. Do you want to save for retirement or a child’s college education? Retire early, later, mini retirements, or start a passion project once you’re financially independent? Buy a business, start a business, sell a business? Sell or buy your home, rent and travel?
One Big Question
What do you do for a living? Many professions require specific planning strategies due to certain employer benefits, insurance needs, debt management or retirement income. Plus, if you’re a business owner, entrepreneur or solo-preneur, there’s all sorts of ways to take advantage of profits. For example:
· A retiring contractor leaving behind a physically strenuous work life may initially think it’s best to file for Social Security as early as possible, without fully understanding the true costs and benefits of waiting
· A schoolteacher with a pension may be unaware of the opportunities to save and invest through tax advantaged accounts outside of the pension plan
· A young physician may require a specific type of cash-flow and risk plan to make sure student loans are paid and family is provided for in case of an unforeseen emergency.
Life Stages Matter
Life stages also often determine the need and perceived availability of specific financial advice. According to a recent survey, only one-third of Americans consistently take action after receiving financial advice. Age, gender and circumstances of advising clients, however, often predicate who will take financial advice, as does the specificity of that advice.
For instance:
· Individuals are more than 60% more likely to make a financial change after an explicit investment recommendation rather than after general guidance
· One in five of the 1,006 American adults surveyed called finding relevant financial advice “difficult”
· Of those, 51% said they don’t know where to start looking, and 74% said they don’t know which sources to trust for financial advice
Age and Gender Matter Too
The survey also found that the desire to seek advice and take action differed based on age, gender and other individual factors:
· Respondents ages 18 to 34 showed more interest in getting financial advice than any other age group surveyed, and 40% said they frequently look for financial advice
· Those in this age group were also more likely to make changes after receiving advice
· Nearly half of women surveyed believed personalized, objective advice will cost more than they can afford, and more than one-third said they don’t have the time to look for it
· Women were, however, more likely than men to act on advice received
· Boomers were the most likely to report that financial advice was very difficult to find. Only one in three admitted they consistently act on the advice they do receive
The Bottom Line
When you’re talking to your financial advisor or interviewing potential planners, ask their specific experience with individuals in your profession and stage of life. Ask about strategies unique to your situation and settle for nothing less than advice personalized to your needs.
