Deciding to work with a Financial Advisor is a big decision and one that we believe is centered around trust and relationship. I believe earning trust is the first step to any relationship, and in my profession, being transparent about the costs of working with me is an integral part of building trust. My goal in this week’s newsletter is to help you see that the cost of working with an advisor should be seen as an investment with ROI instead of an expense. So, here are the benefits in working with an advisor that can provide a significant ROI.
1. Emotional Guardrails
It is very easy to make decisions because of the way we feel. In many, cases this completely fine, but not necessarily with your financial plan. Having someone help you see your financial picture objectively can be incredibly impactful. There will be times where we don’t like the short-term outcome of investing. Take last year as an example… the S+P 500 was down 19.44%. But we know that the market has returned just above 10% on average every year over the last 100 years. It can be hugely important to have an advisor in your corner coaching you through these tougher years when the market is down.
2. Comprehensive Plan
A Financial Advisor is trained to take all factors into consideration with your plan. Have you considered how taxes, potential long-term care and healthcare expenses, inflation, sequence of returns, etc. will factor into your financial situation? It is possible we could avoid a major headache down the road because one of these factors was planned for years ago.
3. Expertise
Having someone that has a team of expertise behind them can be important. NFocus Financial Partners has 4 advisors with over 75 years of combined experience, a CFP on staff, a professional network, and additional vendor/broker dealer/compliance partnerships that put us in the best possible position to serve our clients well.
I want to wrap this up by referencing a study that was conducted by Vanguard in 2019. They concluded that the value a Financial Advisor adds to their clients add up to 3% of additional net return per year. I have included a write up of their findings if you are interested in reading more- Putting a value on your value: Quantifying Vanguard Advisor’s Alpha
