The idea of a financial advisor may bring to mind associations with numbers, the economy, and the stock market. This is all relevant, but what if we told you that a financial planning meeting is about much more than the numbers?
Financial planning touches every part of a person’s life, which is why a no judgment zone is necessary to facilitate open conversations to learn relevant information about you. When visiting a doctor, leaving out a symptom, a lifestyle habit, or family health history can lead to a misdiagnosis or lack of diagnosis altogether. The same is true in financial planning: The more your advisors know about you, the more precise your financial plan will be. We will also be better equipped to help you stay on track, even when it requires intentional change on your part.1
Facing Your Money Mindset
To build your plan in the most effective way, we begin with the understanding that finances are deeply emotional. Money is interwoven with identity, security, family history, and relationships. Our money mindsets are often shaped long before we ever open a bank account, let alone a brokerage account.
For example, we may work with a client who has multiple advanced degrees, a successful career with decades of experience, and a strong income. If this client grew up in a household where money was unpredictable, they may still operate from a place of scarcity. Despite their objective success, they may avoid investment risk out of habit. That instinct might have been necessary as a survival strategy in childhood. However, as a financial strategy today, being too cautious can have detrimental long-term effects, such as not having enough saved for retirement. The opposite can also be true of a client who grew up in an environment where money was plentiful without needing to work for it. This client may not realize they’re overspending because they’re used to money “just being there.” This is a different mindset that can result in the same problem of lacking enough funds in retirement.
When these money habits and patterns are brought to light during the planning process, we can more effectively partner with you to adjust behaviors that support reaching your goals. We are here to listen and create a plan that supports you financially and emotionally while holding you accountable to follow-through on aspects of the plan that lead to successful outcomes.
Planning Versus Purely Optimizing
The information we know about you shapes the recommendations we make. Take a healthy couple in their thirties with young children. We may learn that early death from serious illness runs in the family, and this causes the couple anxiety about what would happen to their children if one or both of them pass away young. In this case, we might recommend a higher amount of life insurance coverage.
This extra coverage may be more than what is necessary, but as long as it’s still within their budget and appropriate for their plan, the additional insurance can be worth every penny if it helps the client sleep at night. That’s the difference between pure quantitative optimization versus building a plan that balances the numbers with a genuine understanding of you.
Sharing Your Full Story
No matter what you are going through, there is no judgment in our work with clients. That doesn’t mean it’s always comfortable to discuss things like being estranged from family, divorce, fertility, or money habits that may carry shame. There are also counterintuitive feelings that we can help you navigate. A windfall from an inheritance can come with complicated strings attached, or trigger feelings of guilt, leading to avoiding decisions altogether. There can also be health struggles that require unexpected, sudden changes to their career or housing situations, which necessitate making changes to their financial plan.
None of this is easy to discuss, but avoiding it can have adverse effects. Imagine a client who did not mention they have a sizable Inherited IRA they are taking distributions from every year. Perhaps they don’t tell us about it as they’re embarrassed about being reliant on the extra income. While the sentiment is understandable, this could result in a flawed tax plan if the additional income from the IRA distributions is unknown.
We work with clients on situations like this every day. None of it surprises us, and none of it is ours to judge. Our role is to understand the full picture, so that we can put the pieces together across all facets of the plan, including tax, estate, investments, and insurance.
Collaborating with Your Advisor Team
We know that opening up to a professional can feel unnatural, especially when the primary focus is money, one of the last real taboos in polite conversation. As you communicate your story, we evaluate the impact of the information on your plan and continuously refine it as your life evolves.
You are not alone as you navigate major life and money decisions. Joy, shame, embarrassment, tension, excitement, and relief are simply part of being human. Big emotions and occasional conflict are expected when it comes to major life decisions. We want you to feel safe in knowing that what you share with us is confidential. These open conversations create the kind of collaboration between you and our team of advisors that results in a high-quality financial plan supportive of the whole of your life.
1 Disclaimer: We are not therapists. There are situations where Financial Therapy may be an additional resource we recommend for clients who need deeper emotional support to resolve what is holding them back from progress.
