Making Financial Sense: Communication is Key
Welcome to the 2017 holiday season! I wish you and your extended family quality time together making new and lasting memories. Using my own history as a guide, you will likely spend precious time planning a savory holiday meal for your family, choosing the complements to the entrée, adorable outfits for the kids, contemplating the perfect gifts for your loved ones; the list goes on and on.
I find an interesting occurrence happens during the holidays. It is the obligatory family visit from relatives you have not seen or spoken to since last year’s festivities. The infrequent visits and lack of communication from your loved ones have many parallels to the relationship that typically exists between a majority of women’s financial and investment planning with their advisor.
According to Accenture Consulting’s Reinventing Wealth Management For Women report:
· Only 44 percent of women talk to their financial advisor more than once a year
· Only 48 percent of women talk to their financial advisor quarterly or more about new investment ideas
· Only 35 percent of women talk to their financial advisor quarterly or more about retirement planning or to see if their goals are on track
These facts illustrate that the vast majority of women investors are not engaging or communicating with their advisors as frequently as they should in order to support their financial goals related to critical topics such as asset protection, sandwich generation pressures, career breaks, or wealth transfer.
This lack of communication presents opportunities for your financial affairs to become misaligned with your financial goals. To help get you back on track, I suggest you clearly determine what your expectations are from other viewpoints outside of simply returns. Similar to how we all have a varying idea of what a perfect holiday meal is; we also have different opinions on what it means to have financial independence. What do you feel is a good fit for you to become better educated on various topics? How often would you like to hear from your advisor? What investment products (CDs, corporate bonds, zero coupon bonds, mutual funds, individual stocks, ETFs, annuities, separately managed accounts, etc.) are you comfortable utilizing? What are your beliefs about what money can do for you? What are your investment philosophies and do you have any restrictions based on your belief system?
In my experience, unlike their male counterparts, women investors seek a professional relationship with a person who understands their unique “life pictures” and “financial journeys,” rather than just their investments. Women investors are typically more conservative long-term investors than men. Nearly half (48 percent) of women in the Accenture Consulting research said they want to preserve as much wealth as possible.
I would suggest that before engaging in a professional relationship with an advisor, please have a strong understanding of his/her:
· Educational focus helping you address wide ranging topics
· Client communication and service model
· Investment Management Philosophy
· Income Management Process
· Cost Transparency
I believe having an understanding of the items noted above (in addition to any others you feel are important) enable you to feel confident as you develop your own “professional family.” I believe confidence comes from the mutual transparency of the rules of engagement and what is expected of both parties.
Securities and advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.