When getting to know people, one of the most common questions we ask one another is: “What do you do for a living?” Interestingly, our answer to that question is almost always wrong. When someone asks us what we do, we usually spout our job title back to them. That’s not what we do. That’s what we ARE. I’m a Financial Planner, Wealth Manager, Investment Advisor, Financial Representative, Asset Manager, or any of the myriad of titles that my career has given me to do more-or-less the same thing for the last two decades.
That hardly tells anyone what I do, and it occurred to me that most of the general public is unaware of what they should expect from a person that calls themselves any of those titles. Interestingly, there is no comprehensive definition of the services provided by financial advisors. As such, you can expect a very unique and different experience from one to the next. Let me try to define what I do in my practice. Maybe that will help you utilize some of our services that you hadn’t thought of, or maybe it will help you understand how we can help others reach their goals. Perhaps it will help you understand what value you’re already getting from your relationship at Paducah Financial Consultants.
1. Portfolio Management
a. This is the service that most people expect. You expect your advisor to help maximize your return as your portfolio manager.
2. Risk Tolerance Assessment
a. How much risk are you willing to take and what investment products fit that profile?
3. Investment Education
a. How do your investments work? How does that fit into your plan?
4. Budgeting
a. Monthly or annual budgeting for business or households.
5. Behavioral Management
a. Keeping you from making uninformed or harmful emotional decisions with your investments. Helping you form or keep disciplined investing habits.
6. Retirement Planning
a. Income projections, budget projections, social security planning, tax planning, cash flow management.
7. Tax-sensitive Investing
a. Design investment strategies to minimize tax losses over time.
8. Education Planning
a. Help family members make a plan to fund education for the next generation.
9. Beneficiary Designation
a. Identify and update beneficiaries. Discuss the types and meaning of different beneficiary designations.
10. Risk Management
a. Identify what risks you may have to your plan and decide how to manage those risks.
11. Estate Planning
a. Monitor federal estate and gift-tax laws. Help you decide how to form your basic estate plan.
12. Debt Management
a. What debt is smart for you to have? What debt should you pay close attention to? When should you get out of debt? How do you get out of debt?
13. Evolve your Plan Along with your Life
a. Provide periodic consultations based upon your needs as a client. Make sure that your financial goals are always current and a plan is always in place to help pursue those goals.
There are hundreds of other services that are available with a good advisor. Most of our clients do not use all our services all the time. Your stage in life and your need for advice determine which parts of the financial planning process you may need. If you’re younger, you can engage us for debt management strategies, behavioral management, portfolio management, and education planning. As you age, you may glide through those and eventually be more interested in estate planning, retirement planning, and tax-sensitive investments.
Having a financial advisor isn’t all about parking your money with someone and leaving it. A good financial advisor should help you form a basic strategy and give you advice that lets you enact that strategy. That person should also know that your life will change and your strategy will change with it. A great advisor is a valued counsellor that provides you with clarity and purpose.