April 24, 2019

Who’s In Your Corner?

Written by Barry J Swaim, CFP ®, Posted in

THE BENEFITS OF WORKING WITH A FINANCIAL ADVISOR TO CREATE YOUR PERSONAL FINANCIAL LIFE PLAN

It is widely agreed upon that most of us don’t do our own plumbing, we don’t fill our own cavities, and we tend to bring our vehicles to the mechanic when they have problems. There are certain things in life where someone’s expertise is both valuable and a time saver. The same can be true of a good financial advisor.

In an age when so much information is a keystroke away, including investment advice, it can be challenging for an investor to know if they are making good choices or if seeking out a financial advisor is worth the expense. Compounding that is the fact that investing, especially for retirement, is a long-term game. It’s hard to look ahead, oftentimes literal decades, and know that you are making the right choices. But the difficulty of seeing far into the future is exactly why a financial advisor is crucial in navigating the complexities of taxes, social security, pensions, and investing; one can help you balance risk and return responsibly and effectively. Studies have shown that having financial confidence and a sense of long-term security improves your overall well-being.[i] So, getting on track and staying on track toward your financial goals is a good thing and taking advantage of all resources and assistance can only help.

Having a Goal

Having enough for retirement is a good start, but it’s vague. Part of a financial advisor’s job is to help you refine your plan from ‘enough’ to a more trackable number and set of objectives. To get started, it’s important for every person to spend some time understanding their overall budget and their goals are aligned even between spouses. A financial advisor can then look over all that information and help come up with a diversified plan to get you to your goal. Bringing in the expertise of a financial advisor to help draw up long-term goals will help cover more ground in areas like taxes, estate planning, strategies to save and budget, and how to consider major life transitions and how they may shift your goals and needs.[ii]

Having a Team

Another benefit of using a financial advisor is the security of having a support system with your interests as a priority. As the stock market rises and falls, there are temptations to pull out, sell off, and change your portfolio when the best course of action may be to sit tight. Having a knowledgeable team that has designed your investments to be both diverse and resilient for long-term growth can provide support and education during times of uncertainty.

An advisor can work as something of a navigator, a behavioral coach and a mediator for their clients. They can help steer the ship, using their specialized knowledge, they can keep you on track as far as budgeting and spending and they can help provide counsel to spouses or family members that have different ideas about how they want to budget, save, spend and plan for the future. Having someone whose specific job it is to keep you focused on your objectives and act as a fiduciary, with your best interests first in mind, can help you stay present in the aspects of your life that matter most to you whether it be your career, your family, your friendships or your preferred past times.[iii]

A Fiduciary Commitment

We are all busy with work, life, family, etc. There is only so much time in the day. Having the confidence that those handling your financial plan are knowledgeable and making unbiased and conflict-free decisions on your behalf is critical. A fiduciary adviser is one who is in a special legal position of trust and confidence. Fiduciaries are legally required to manage the assets of others with loyalty, always putting clients’ interests first. By understanding the concept of fiduciary in the context of advisors’ compensation arrangements, investors will be better equipped to find professionals who are objective and trustworthy.

Just 10 percent of advisors are 100 percent, fee-only fiduciaries, meaning that their only source of compensation is their clients. Hence, the word “only” is used, not the word “based.” Instead of selling products, they only sell their knowledge and guidance. As true legal fiduciaries, they represent and serve only their clients’ interests, not those of the company or bank they work for. Their fees are typically a percentage of the value of assets under management, an hourly consultation charge, retainer fee or flat fees for services such as developing a comprehensive financial plan. By refusing to accept payments from sources other than clients, fee-only advisors are true fiduciaries and loyal to their clients. Whatever title an adviser uses isn’t important here. What matters is who they legally must represent and how they’re compensated.

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Avoiding Pitfalls of Going it Alone

Reacting too fast to the stock market and buying/selling at the wrong times is one issue. Getting swamped with unnecessary fees is another. A big mistake for a lot of independent investors is following hot tips and financial advice from friends, family, or financial news.[iv] Making huge, possibly life-altering choices based on hunches from non-professionals or reactionary news reports could cause damage to your long-term investments. All investors should educate themselves and seeking financial guidance from someone who is committed to making financial choices that are always in your best interest can help alleviate the stress that can come with not knowing whether your choices are being made with a full understanding of the entire picture.

There is a chance that with enough YouTube videos and instructional books you could do your own plumbing, or even perform that root canal (gross). But with the risks being so high that something more expensive or damaging could go wrong, we usually chose to seek out experts instead. Treating your financial health and future as seriously and seeking out expert counsel, helps to ensure that you can reach your long-term goals and potentially head off any major obstacles down the road. Treating your financial health as a priority, much like your physical health. Financial advisors can be an asset and support system for anyone trying to get a handle on their goals and investments, who could use the support and knowledge of an expert in their field.


[i] https://academic.oup.com/jcr/advance-article-abstract/doi/10.1093/jcr/ucx109/4600084?redirectedFrom=fulltext

[ii] https://money.usnews.com/money/blogs/on-retirement/articles/2016-07-20/the-pros-and-cons-of-hiring-a-financial-advisor

[iii] https://money.usnews.com/investing/investing-101/articles/2017-08-30/4-myths-about-financial-advisors

[iv] https://www.forbes.com/sites/jaimecatmull/2018/02/14/5-investing-mistakes-that-can-destroy-your-retirement/#683a62915435

To consult a financial advisor from Accruent to help you with your financial plan as a practicing physician, please call (336) 760-4829 or email us at info@accruentadvisors.com

About the Author
Barry J Swaim, CFP

Barry J. Swaim, CFP is the founder and president of Accruent Wealth Advisors. He received his BA degree from the University of North Carolina at Greensboro. Barry has also earned the professional certification of CERTIFIED FINANCIAL PLANNER practitioner from the Certified Financial Planner Board of Standards.