Do you feel confused about what a financial advisor actually does? Do not worry! You’re not alone. As a financial advisor, it took me years to answer this question myself. With this article, I hope to throw back the curtain and show you exactly what a consultant is or should be …
This story begins in the fall of 2010 in the coastal city of Costa Mesa, California. The Deepwater Horizon spill occurred in the Gulf of Mexico, which Kesha had just released Tick tockand a child in a gray suit was walking down a sidewalk and wiping sweat from his forehead. While it was fall across the country, California had not yet received the memo.
He’d eaten a big breakfast, stuffed his pockets with investment brochures, and gone door to door to speak to anyone who would listen about investing. This was his first day as a financial advisor. After a dozen slammed doors and a close encounter with a dog he’d given up and who was walking back to his car, a battered green Mazda Tribute, when he heard a siren and saw blue lights flash behind him. Apparently one of the neighbors was confused about why a man in a suit had paced the neighborhood and called the police to investigate. The officer was confused about why a financial advisor would go door to door like a vacuum salesman. The boy was too. It had all made so much sense when his employer told him that such a business could be built. He had presented numbers, fancy spreadsheets, and examples of successful consultants who had started out this way. But now the boy began to have his doubts.
I was the child. And so began my career as a financial advisor.
What do you think of when you hear the term “financial advisor”?
Lots of people think about investing, and for many advisors it’s true. They have fancy offices, don’t feel like working with people who don’t have to invest $ 250,000 or more, and love using spreadsheets with lots of numbers. The more numbers the better. But that’s not all a consultant can do for you. I’m not a bit surprised at the confusion about what a financial advisor actually is. As a financial advisor, it took me an embarrassingly long time to find out what I was doing.
Like many people in our business, I started to think that being a consultant is investing the client’s money. My career began with walking door-to-door introducing stocks to anyone who actually opened the door. My bosses told me this was because a company should be built with a firm face-to-face handshake. Because of this experience, I felt more like a salesperson than a consultant and I still wasn’t sure how much pressure to put on the perfect handshake. At least with the coronavirus, I don’t have to worry about that anymore.
After quitting my job as a door-to-door investment seller, I started working as a financial advisor at a large national bank. Here I was introduced to the concept of “financial planning”. At this company, if you let me sell you a mutual fund, I would submit a 50-page document telling you whether or not you could retire. I stayed here for about three years before moving on.
My next stop was at a regional investment firm in St. Louis, where I joined a group of planners whose only job was to create financial plans for clients. No more sales investments for me, thank you very much. I’ve been in the process of doing bigger and better things … putting together financial “plans” that were robust. This included age, estate, tax and insurance analyzes.
Our recommendations were straightforward. If your plan says you can’t retire? Quite simply, our advice was to just save more, spend less, or retire later. Good right? We saw no need to investigate how in the world it was actually to be done. Hard to save more when you have to buy hockey pads for your kids and your house needs a new roof, right? At the end of the day, even though I wasn’t selling any more investments, I was basically doing the same thing that I did in my previous job … giving people a thick packet of paper that said you can either retire or not and that was it.
But is that really financial planning? I do not think so.
What about the people who are not planning to retire? Or those who just don’t want to be in debt anymore? How about the family wanting to send their kids to college while they can still go on family vacation? Or the people who need to buy a new water heater, the people who want to give money to charity, or those who just want to find out WHAT to do with their money.
There is so much more to life than saving for retirement. A lot more. In fact, some of our happiest customers are those who are still “retired” from working. And those who save for the future and spend in the present seem to enjoy life just as much.