Money can be a topic people are reluctant to discuss, but having an open, transparent dialogue about your finances should be the goal when it comes to your relationship with your financial advisor. An integral part of the client-advisor relationship is dependent on your advisor knowing the ins and outs of your overall financial situation, as well as your goals for the future. Arming your advisor with this information helps ensure that he or she can provide you with the most appropriate resources and strategies.
Share your goals
“These conversations often times are deeply personal, about the things clients hold most dear, and it’s not always an easy conversation for clients to have,” says Greg Shiveley, first vice president for the Financial Advisor Platform Team and Strategic Solutions Group of Wells Fargo Advisors.
He finds clients may hold back because they have a goal that they haven’t even discussed with their partner yet. “Bringing that up with a third party in the room, the financial advisor, may be a little intimidating,” the St. Louis–based Shiveley notes.
But, the more open clients are with their financial advisors, the more everyone becomes a part of the financial conversation.
A high level of openness also helps the advisor craft a plan that addresses not only the client’s hopes for the future, but also his or her tolerance for risk. Should any goals require going beyond a client’s tolerance for risk, the financial advisor and client can work together to change the goals to help fit the risk tolerance.
“Generally, the more openness there is in the conversation, the better everybody walks away,” Shiveley says. “If clients aren’t open in putting everything on the table about what they want their life to look like in their post-retirement years, it’s really hard for their advisor to work with them to help allow them to do those things. Advisors have to know what is important and what the clients want to achieve.”
Map out your future
The Envision planning process can help create an open dialogue between clients and their financial advisors. “The Envision process can give clients a huge advantage, because it is designed to help clients live the one life they have, the best way they can,” Shiveley says.
The process starts with giving the financial advisor an understanding of who the client is, what they want to achieve and what their concerns are about achieving those things. “The advisor doesn’t focus on the financial aspect of the conversation up front,” Shiveley says. Rather, he continues, the conversation is based on the clients’ dreams about what they want their future to look like. “It’s about understanding goals.”
Advisors can help with all factors that may impact retirement planning. For example, Shiveley is seeing more and more clients dealing with the reality of caring for an aging parent or an adult child. Clients may also be caught off guard by inflation. With life spans increasing, Shiveley finds that inflation can play a huge role in a client’s ability to maintain their purchasing power over 30 years or more of post-retirement life.
In addition, a financial advisor can help craft plans to provide for further education, for clients as well as for their children and grandchildren. “Clients have goals for themselves,” says Shiveley. “Schooling may be a smart part of that. Education is holistic. It’s not just about children; it could be about the clients themselves.” An advisor can help the client navigate these issues.
Finally, clients should remember that having an open conversation with their advisor in the beginning of the relationship doesn’t mean they are finished. “When change happens, clients need to know that they can and should go back to their advisor and talk about those changes and how they impact their plan,” Shiveley says.
Envision is a registered service mark of Wells Fargo & Company and used under license.
• This article was written by Wells Fargo Advisors and provided courtesy of Ahwatukee Financial Advisor S. Kim DeVoss, CFP. Reach her at (480) 940-5519. Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE. Wells Fargo Advisors, LLC, Member SIPC, is a registered broker-dealer and a separate non-bank affiliate of Wells Fargo & Company.