You are looking for financial help, or you’ve already got an advisor. You’ve found a few financial professionals at www.ClaroConnect.com to interview, or you’ve already made your final
selection. Now what? How can you help this person help you? Let’s look at how you can make
the most of your professional relationship.
Define Your Goals for the Relationship
Expectations are hugely important for both you and your advisor. When interviewing financial planners to work with, it is important that you make clear what your expectations are. One of the biggest is simply how often do you want to have contact with this person? How often do you want a meeting in person, a phone call, or email updates? Who is responsible for being proactive and initiating contact? What expectations do you have for the services you want to receive? Many financial planners can provide you with not just performance reporting on your situation, but also periodic education on financial topics, news and information on the economy and market, or financial education for your spouse or children.
One of the best ways to define what your expectations are is to ask yourself, “If my investment advisor and I are sitting together three years from now, what do I want to have happened in between to make me happy?”
Define Your Own Financial Goals
You can’t get there if you don’t know where you’re going. The first step in creating a financial plan is to identify your goals. Your goals should be achievable objectives over which you have control and that accomplish something positive in your life. One of the most common mistakes people make when stating their goals is to focus on the tools or short-term results, and not the bigger picture of “Where do you want to be?”
Examples of GOOD goals:
I want to ensure my retirement so that I can travel (visit family, work in the garden, work for charities, etc) after age 65 (or 60, or 70). – Earning money for money’s sake doesn’t make
most people happy. What do you want to do in life? Knowing that often helps narrow down your financial goals. This process allows you to take control over some of the inputs such as how much money you’ll need to save, and gives you realistic options (you might need to retire later
or save more, for instance).
I want to ensure my money goes to my legacy (kids and charities) in the best way possible.
– This is a common goal- would you rather have your money spent by your family and charities
or taxed away to be spent by the government? Depending on your situation, the financial tools used might be life insurance, trusts, or gifting, but you need to start with your goal, not the tool.
I want to protect my family against loss of life, income, health, etc. – Protecting your and your family’s lifestyle is often one of the first goals people decide to fill when starting a financial plan.
What are common mistakes people make when looking at goals?
I want to own a hedge fund, or last year’s “hot” mutual fund, or the current “hot” stock – Specific financial products should not be goals of their own. Products are simply tools used to help solve major goals in your life.
I want to beat the stock market – Judging your portfolio against an arbitrary benchmark should not be a goal. Beating the stock market, but still falling short of retirement goal is still a failure. Lagging a benchmark, but still meeting your goals is still a success. Judge your financial plan against your life goals.
