As a family of retirement planners and not the corporate “Wall Street” guys, I like to think we are pretty approachable as far as financial advisors go.
But I learned very early on in my experience at Ruedi Wealth Management that the vast majority of people are scared to talk to financial advisors, even if they know they would probably benefit from expert advice.
They often fear they will be judged for past mistakes or will receive bad news about their financial situation. They may also worry that they don’t have enough money to be able to work with an advisor or won’t be able to afford it, and may just plain mistrust “financial people.”
But the vast majority of the time, these fears are not justified. That is why I felt the need to address seven of the most common fears. They are:
Fear of Judgement
Whether it be for past financial mistakes, investment decisions they didn’t know they got wrong, or simply not having enough in assets, people are often scared to talk to an advisor out of the fear they will be judged.
Your income and assets will receive neither my admiration nor my judgement. These are just numbers to me, inputs that go into your financial plan. What we care about is making sure you get the most out of whatever you have.
Your past mistakes, or ones you don’t know you are making now - they’re typical. Everyone makes them, and trust me, I’ve likely seen it before and much worse.
Fear They are Behind Financially
As retirement planning specialists, most people seek our advice when they are at least considering the idea of retirement, whether it be in the immediate future or down the road. Nobody wants to be told they will have to work a couple extra years in order to retire comfortably.
I’m not going to say this will definitely be the case, but in my experience the vast majority of people who come in for a consultation with us are either on track or even ahead of schedule to achieve their retirement goals. I suppose this is because people who seek out advice are already somewhat money conscious.
Fear They Will Need to Change
A lot of people like the lives they are living and fear an outside perspective could suggest they need to change.
An advisor is only going to suggest you make a change if you really need it - we don’t like to deliver bad news any more than you like to hear it. But perhaps making a small change now could help you avoid some worse pain in the future. Wouldn’t you want to know?
Though people tend to think a financial advisor will force them to “eat their vegetables,” in the form of spending less and saving more, we often get to provide people with the good news that they can, and should spend more.
Too Time Consuming
Sure, it takes time to talk to an advisor and start taking responsibility for your finances relative to doing nothing. But one of the most valuable things advisors provide for their clients is extra time to do the things they enjoy.
I think people underestimate how long it would realistically take to research and understand complex financial issues in order to make the right decisions, and then take the appropriate actions. An advisor cuts out all of that.
An advisor can often drill drown a financial issue into a decision you can understand in minutes, and take responsibility for any tasks that need to be done after a choice is made.
Financial Advisors are Only for “Wealthy People”
One of the most common reasons people don’t seek out a financial advisor is they feel they don’t have enough money.
Whether that means they fear they don’t qualify for advisor minimums or they feel like they don’t have enough money for good advice to really be “worth it” or some combination of both, it is a huge hesitation for many people.
Though many advisors have minimums of a million dollars, there are increasingly more options for people with less than the million or half a million dollars they think they need to get good advice.
Robo-advisors and large brokerage firms have created online, planning-centric investment services that have enabled money to be managed very efficiently. For people who want an online investment and financial planning platform like that, paired with advice from a CERTIFIED FINANCIAL PLANNER™ Professional at Ruedi Wealth Management, we recently launched Ruedi Wealth Co-Pilot for people with $25,000 or more to invest.
Moral of the story, there are good options for everyone to get advice and everyone - even young people who haven’t accumulated significant assets yet - can benefit from them tremendously.
Can’t Afford It
A lot of people are scared working with an advisor is going to be too expensive or fear they don’t have the cash to pay for one right now.
Though I can’t speak for all advisors, many (like Ruedi Wealth Management) charge a percentage of the money you have to invest with them. So simply multiply whatever percentage they charge (usually around 1% each year) by the amount you plan to invest with them and that is what you will pay.
In most cases, you don’t have to write a check up-front or in the future each time you pay fees; the fee is simply paid out of your account without you having to do anything.
Everyone in the Investment Industry is the Wolf of Wall Street
Have you ever seen a movie depicting “financial people” in any sort of positive way? Financial people are portrayed in pop culture as generally greedy and untrustworthy and that has an impact on the way people feel about them.
But any bad of the financial industry is balanced by the good: advisors who truly act with their clients’ best interests at heart because they 1) are not sociopaths and care about their clients as people, and 2) are obligated to as fiduciaries. We are out there, you just have to look for us.
The irony of the mistrust of “financial people” in general is that it makes people less likely to seek the counsel of the good guys, which actually makes them more likely to fall prey to the sketchy investment schemes.
What to Do?
First of all - don’t be afraid. Financial advisors are real people who have seen too many different financial situations to be judgmental anymore. Your financial details are just numbers for us to work with.
Financial advisors are in this business to deal with people’s finances, whether that be a legacy of success or a series of mistakes; it makes no difference to us.
Though you may feel you are short of your goals or an advisor’s expectations, if you are considering talking to a financial advisor, you are probably one of those responsible people who will get some good news about your progress towards your goals.
Seek out several advisors and choose one whose expertise matches your needs and makes you feel comfortable. Having an expert in your corner watching over your finances so you don’t have to worry is the reward for temporarily getting out of your comfort zone and seeking advice. Trust me, you’ll be glad you did.
