Episode 46

Investors and Financial Advice


What kind of role can a financial professional play for an investor?

The answer: an important one. While the value of such a relationship is hard to quantify, the intangible benefits may be long-lasting.

There are certain investors who turn to a financial professional with one goal in mind: the “alpha” objective of beating the market. But even Wall Street’s brightest money managers can come up short.

At some point, these investors realize that their financial professional has no control over what happens in the financial markets. They come to understand the real value of the relationship, which is about strategycoaching, and understanding.

A financial professional can provide guidance about today’s financial climate, determine objectives, and assess progress toward those goals. Alone, an investor may find it difficult to do any of these tasks. Moreover, an investor may make self-defeating decisions. Today’s steady stream of information can prompt emotional behavior and may lead to blunders.

No investor is infallible.

Investors can feel that way during a great year when every decision seems to work out well. But overconfidence may set in, and the reality that the markets have challenging years can be forgotten.

A financial professional can help an investor commit to staying on track.

Through subtle or overt coaching, the investor can learn to take short-term market volatility in stride and focus on the long term. A strategy is put in place based on the investor’s goals, risk tolerance, and time horizon.

As the investor-professional relationship unfolds, the investor begins to notice the intangible ways the professional provides value. The professional may help explain the subtleties of investment trends and how potential risk often relates to potential reward.

Perhaps most importantly, the professional helps the client get past the “noise” and “buzz” of the financial markets to see what is really important to their financial life.

The investor gains a new level of understanding, a context for all the investing and saving. The effort to build wealth and retire well is not merely focused on success but also significance.

A financial advisor, or better yet, a retirement advisor can help pre-retirees really focus in on an investment strategy that will yield the most sustainable and efficient income in retirement. The traditional 60/40 stock/bond portfolio, or a portfolio that’s too heavily weighted towards stocks like an 80/20 portfolio may not be in your best interests. If you’ll be relying on this portfolio to give you an income for life, you may need an advisor who can help you de-risk your portfolio and perhaps help you create a personal pension plan (i.e. a guaranteed income stream that’s protect from market volatility) as well. A personal pension plan protects you from market losses, while also providing some growth.

But finding an advisor who knows what he or she is doing with investments and retirement planning can be a challenge as so many of the 300,000 advisors out there have been focused on growing people’s portfolios. there aren’t nearly enough advisors who help people start distributing income from their portfolios. For us women, it’s a known challenge to find an advisor who provides a judgement free zone and allows us to ask a lot of seemingly silly questions about our money and our retirement. For many of us women, we have a lot of shame about our money or lack thereof and our lack of knowledge about investments and portfolios. There are many good advisors out there who have patience, knowledge and empathy for the unique challenges we women face.

I’m going to be running an investing workshop to help women understand the basics of investing and how to invest for retirement. I’ll also be providing some direction on how to find the right advisor. This will be an education only event. I do not provide investment or tax advice. Please email me at lynnt@herretirement.com if you’d like to be informed when this workshop will take place.

In the meantime, if you have immediate worries or needs about your portfolio and the current markets, I can connect you with my significant other, Brian Saranovitz at Your Retirement Advisor. He knows investing and retirement and has helped many women feel more confident and comfortable about their portfolio and their income in retirement.

Finally, I know many people are stressed about the ups and downs of the market, inflation and the economy. However, now is not the time to panic or pull all of your money out of your 401k. Stay calm and stay the course. This too shall pass.

Thanks for listening and remember you can know more and have more. Her Retirement is here to help. Also, remember procrastinating on your plan for retirement or burying your head in the sand is not in your best interests. Make a plan, take action and Get Her Done.

Listen to this podcast episode here

Comments are closed.