Financial Advice

The Value of Financial Advice

Money is emotional and the biggest risk is embedded in ourselves as decision makers. And that is why it is of utmost importance to have a good advisor to guide us through our financial decision-making. But how much value does an advisor really add?

Once I’ve done my homework and have partnered with a skilled and principled advisor who I trust, I may need them to be both my money planner and psychologist. Financial Tip: I will listen to my financial advisor when I’m panicked and think I know better than they do.

My elevator speech is simple, “I help my clients identify their financial goals and set up corresponding strategies to make those goals become a reality.” Often not mentioned, is that I’m also a part-time psychologist.

Thankfully, the Center for Interuniversity Research and Analysis on Organizations (CIRANO) published an in-depth report on the topic, concluding that individuals who work with a trusted investment advisor save more, and feel better prepared for retirement. More specifically, when considering investable assets as a yardstick, 4.2x more prepared. However, not all advisors are created equal.

My favourite interview question for an advisor is, “When do you think that we will enter the next recession?” Followed up by, “What is your best investment idea?” Should their answer deviate from, “I don’t know” for the former, and “it depends” for the latter – then move on.

I find advisors have an incredibly hard time saying, “I don’t know.” Out of curiosity, quiz the next handful of market experts with the same question. You’ll quickly discover numerous conflicting answers and surmise that no one knows for certain. To quote Mark Twain, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

Circling back to my elevator speech, investment recommendations best fit within one’s risk tolerance and should be tailored specifically to a financial goal. Should the prospective advisor jump into his or her thesis on Aerotyne International and bypass probing questions on your overall financial situation, then the cart is before the horse.

At Precision Wealth Management, we help you protect and grow your financial assets through our unique, highly personalized approach. From retirement planning to risk mitigation, tax strategies and investment management services, our professional wealth advisors help you set and achieve your financial goals. Discover the peace of mind that comes from working with your Wealth Advisor at Precision Wealth Management.