Shrewd Decisions Part 1 - Do You Need A Financial Advisor?

September 18, 2015
David Clarken

At some point, you’ve probably considered working with a financial advisor. Most people I’ve met over the past 16 years in finance have expressed thoughts like: “I’m smart, have been managing my money all my life and nobody else will ever care about my money as much as I do.” While I agree, such an important decision is worth additional consideration.

In this three part series, we break down an involved decision process into bite size pieces. As we step through each part, you’ll learn industry secrets, dispel some myths and ultimately make an informed decision.

Do It Yourself vs Hiring a Professional

You may not need a financial advisor—not everybody does. It’s a very important and also a very personal decision. Let’s take an honest look at this decision and some common myths.

I know how to frame a wall and hang drywall. However, I haven’t built any walls in my house because a professional will do it better, faster and prevent me from getting yelled at. Just because you can do something doesn’t always mean you should. Your family’s financial security is as high a priority as it gets and the value of doing it right cannot be understated.

Our single greatest enemy is emotion. Fear and greed are powerful emotions that often leave behind pain and regret. Television exploits our emotions to keep us tuned in, so they can sell advertising time. Consider the last time you made a decision while you were angry or scared. Now ask yourself if you would make the same choice today?

“It is more easy to be wise for others than for ourselves.”  --François Duc de La Rochefoucauld

One myth I hope to dispel is that smart people don’t need an advisor. The most intelligent and wealthiest people around the globe surround themselves with advisors—people with skillsets they don’t have. They recognize the value of leveraging experts—for both their knowledge and their freedom from emotion. However, they don’t blindly follow their advice. Instead, they consider it to make an informed decision. Even professional athletes have coaches.

“To accept good advice is but to increase one’s own ability.” – Johann Wolfgang von Goethe

How much time did you spend planning your last vacation? Compare that with the amount of time you spent thinking about how to save on taxes or planning for retirement over the past year? Other questions might be: Is your estate plan adequate, are your goals defined and realistic, are you comfortable with your risk management plan, do any of your investments overlap and how often do you monitor your total family portfolio?

If any of these questions give you pause, what are you willing to do about it? When you get sick or break a bone, you go to a doctor. If your car breaks down, you bring it to a mechanic. But when it comes to money, we’re bombarded by people like Jim Kramer, Suzie Orman and countless others who sell us on the concept that it’s easy to take care of it ourselves.

Some questions to keep in mind:
     Do I have the time?
     Will I actually spend the time on planning for my goals?
     Do I have the ability to thoroughly research issues to make wise decisions?
     Will I maintain my plan and portfolio vigilantly?
     Can I do it as well as the experts?
     Would it help to have impartial guidance?

I’ll bet that you are intelligent and could learn how to take care of everything yourself. All of the clients we work with are highly intelligent and successful people who could figure things out on their own. However, they realize that their time is better spent focusing on what they’re best at and on enjoying life.

It takes wisdom and courage to seek advice in areas we are not expert or able to address without emotion. It’s far more productive to focus on our strengths and leverage others in areas we’re not so strong. Focus on what you’re best at and passionate about.

At FWI Wealth Management, we help people leverage their time, to spend it on what their best at. We are private wealth advisors, primarily for a select group of very successful business owners and professionals... who, among other things, strive for a work-optional lifestyle--who want to face the future with anticipation rather than apprehension. So we have developed and refined a process that puts all the pieces together for our clients as their life unfolds and as their needs evolve.