Shakespeare Blog: View from the Lake

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Why Do I Need a Financial Advisor?

Written By: Andrea Bulen, CFP®

Woman Planning at Desk

When a prospective client calls Shakespeare for the first time, they naturally have questions exploring if an ongoing relationship would be a good fit for their circumstances. We understand there can be some hesitation when moving forward with an advisor, especially if the person has been self-managing their family finances for many years. Below are common questions we hear from first-time callers and the answers our Shakespeare advisors share to provide insight and build a relationship as your trusted partner.

“Financial planning and investment management doesn’t seem that hard. Shouldn’t I be able to do this on my own?”

– Managing investments, taxes, estate planning and insurance coverage, along with withdrawal strategies and legacy planning are just a few pieces of the complex web that is financial planning and investment management. It takes a balance between all pieces to build a solid, comprehensive plan.

– Advisors (especially those working as part of a team) are constantly training to make sure their expertise in various aspects of personal finance, including investment strategies, tax planning, and retirement planning are up to date with the latest issues that face the financial industry.

– Advisors are well-versed in cutting-edge software that helps determine the optimal strategies to deploy at the right time.

– Advisors provide an unbiased and objective viewpoint, helping you make rational financial decisions and asses risk without emotional biases that can affect individual investors.

– Advisors provide accountability and long-term perspective for clients, especially in volatile times in the market. They help investors stay the course, even when emotions run high. Some of the biggest mistakes an investor can make is veering off course when something unexpected happens. An advisor will help you determine how (if at all) your plans should change.

– Although some people enjoy working on their finances and keeping up to date with the latest changes, you may have a partner that isn’t as involved. It is important to build a relationship for your family and loved ones to be able to come to when you are no longer able to take the lead.

– You likely have other priorities, whether it is your own career, taking care of loved ones or enjoying everything you’ve worked hard for. An advisor can take care of the research, analysis, and paperwork, freeing up your time for other priorities.

– Peace of Mind: Knowing that you have a trusted expert overseeing your finances can reduce stress and anxiety, allowing you to be confident in the legacy you are leaving for your loved ones.

“I just want a “second set of eyes” regarding my financial plan, but I don’t need an ongoing relationship. Why don’t you offer one-time financial plans?”

– Financial planning is NOT static. In fact, every aspect of a financial plan is dynamic. A one-time financial plan may give you an accurate picture of your financial plan on the day it is presented, but things could change even a day later, making those recommendations inaccurate.

– Examples of external factors that cause changes include tax law, investment strategy, interest rates and investment products.

Life in general brings unexpected changes such as death of a loved one, inheritance, job or career change, marriage or divorce, children or grandchildren. Our Shakespeare advisors get calls every day from clients that may require an adjustment to their financial plan.

Financial plans often come with pages of recommendations. Most people will not accurately or timely implement the recommendations.

Everyone is different and each person brings their unique goals and perspective to the table. It takes time to build a relationship and learn someone’s risk tolerance and family dynamics. Our Shakespeare advisors take the time to get to know you and build a customized, comprehensive financial plan that fits your specific goals and adjusts to your life.

“My parents and loved ones didn’t need a financial advisor. Why would I need an advisor now?”

– Retirement plans have changed dramatically in the last generation. In the past, retirement plans were funded mostly with Social Security and a pension, which would give a retiree a steady stream of income to live on in retirement. These income sources would cover a majority of their expenses and no supplemental funds were needed. As long as you lived within your income sources, there wasn’t much more to manage.

– Pensions are becoming rare and Social Security checks generally only cover a portion of a retiree’s expenses. The remainder comes from an income stream from long-term retirement savings that needs to be managed for the varying amounts of distributions. This aspect adds an enormous amount of complexity to a financial plan.

– The added complexity that comes with modern day rules requires more diligence to make your financial plan tax efficient. No one wants to pay more taxes than is required and an advisor can an provide educated strategy to your plan.

– Although none of us could live without today’s technology, it has also brought a level of complication and risk that previous generations didn’t have. This technology puts retirees at risk for fraud. A good financial advisor has a deep relationship with their client and will act accordingly if they see activity on your accounts that is out of the ordinary. An advisor can be used as an extra step of safety net before changes are made.

“I don’t have a need for a financial advisor right now. Do I only need a financial advisor once I retire?”

– Mid-Career: As you progress in your career, your financial situation becomes more complex and you start paying more in taxes. Advisors can assist with optimizing tax strategies, building small business valuations, saving for retirement in a tax efficient way, and optimizing your portfolio for growth.

– Pre-Retirement: In the years leading up to retirement, an advisor can help you make crucial decisions about retirement savings, pension options, Social Security planning, and healthcare considerations. If you are an executive or business owner, an advisor can help you build your succession plan both for a successful exit for your and continued success for your firm.

– Retirement: During retirement, financial advisors play a crucial role in managing your nest egg, ensuring it lasts throughout your retirement years. They can help with withdrawal strategies, investment management, and ongoing financial planning.

– Inheritance: If you come into a significant sum of money through inheritance, a financial windfall, or a business sale, an advisor can help you make the most of it and develop a plan for long-term financial security.

– Major Life Transitions: Events like divorce, marriage, or the birth of a child can have a profound impact on your financial situation. Advisors can help you adjust your financial plan accordingly.

“There are technology platforms and educational videos that I can follow to manage my investments. What can you offer that I can’t do on my own?”

– Our Shakespeare advisors leverage proven principles and strategies to maximize wealth. This can lead to higher and more consistent rates of return, without cognitive biases and fear of headlines that can easily impact the “do-it-yourself” investor.

– Shakespeare Wealth Management offers big firm technology with specialized delivery. Simply using online tools to determine how to rebalance your portfolio can lead to unnecessary tax consequences. Shakespeare reviews every trade made in a client’s account to ensure it is not only the right trade for investment purposes, but it is also as tax efficient as possible. Online rebalancing tools and software simply can’t accomplish this.

– An advisor takes on the often time consuming tasks that are necessary to make your customized financial plan run smoothly within this technology. These tasks include trading, tax loss harvesting, selecting and weighting appropriate asset classes, reviewing and implementing low cost and tax efficient investment vehicles, and rebalancing to control risk and enhance returns.

– Though technology is constantly changing and improving, it is still not perfect. It takes a hands-on approach to make these platforms work for you. Often requiring a safety net check in and calls to customer services lines that your advisor will do on your behalf.

– It is human nature to react when we feel we are at risk. Unfortunately, this happens often with the constant alarming headlines regarding the financial markets. It is hard to see past this when you are managing your own finances. Shakespeare’s advisors are here to remind clients of the long-term plan that we have in place, settle nerves and keep clients on track.

The Shakespeare Difference

The Shakespeare team will help you navigate through difficult financial markets, changes in tax laws, changes in your health, the ups and downs of your career and more; making sure your financial plan stays on track at every turn. We are your local, trusted financial planning partner, taking our time to get to know your financial goals and providing guidance to create a customized financial plan to fit your life.

Learn more about the Shakespeare Approach along with our Fees and Minimums. If you feel we may be a good fit for you, our Shakespeare advisors would love to get to know you with an introductory phone call at 262-814-1600.