September 29, 2023
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Opinion: What is a financial advisor?


By Joe Weiland

I had lunch today with a younger acquaintance of mine. Let’s call him Jim. I have known Jim for a number of years, and he has always impressed me with his business acumen. At a young age, he has managed to put together a sizable, yet a bit illiquid, net worth. He has an investment account managed through a local bank, a long-term tax accountant he trusts implicitly, an estate planning attorney he is happy with and an attorney who has handled all his transactional work the last 20 years.

He does not have a financial advisor.

What is a financial advisor? A financial advisor is a person that asks a different question than the other professionals in this group.

The attorney asks, how do we mitigate the liabilities? The CPA asks the question, how do we lower our taxes this year? The estate attorney asks, how do we have your wishes best carried out upon your death? An investment advisor asks, which stocks or bonds should you hold today?

A true financial advisor asks: How can your finances improve your life and how do you end up with the most chips at the end of the game?

These are different questions. Each very important to ask. Most people do not understand that their advisors have a difference of focus.

Jim already does work with a person at the local bank that may have the title “financial advisor.” But like the “service technician” at a Jiffy Lube, the title claims more than is being delivered. Oil can get changed, but really nothing else is in the job description.

In my years at Merrill Lynch, I fought with the “powers that be” to be allowed to give financial advice. They only wanted the “the advisor” to sell investment advice. We settled on the understanding that I could talk about anything that I want, as long as I did not put anything in writing. When asked about my years there, I simply say that it was like a pair of shoes that didn’t quite fit right.

How does a true financial advisor work with a client to ensure that their finances have meaning and that they end up with the most chips? It begins with a deep dive into the client’s plans and goals for their career, finances and legacy. This is followed by an annual cycle of regular meetings, each with a specific goals and questions: estate planning, insurance reviews, investment reviews, tax planning, as well as annual reviews of overall financial progress.

When we have big decisions, we model potential outcomes of different choices. If an advisor is already engaged, this a clean and efficient process. The advisor already understands the long-term goals and challenges of this particular family. Answers are given with the two goals in mind: our best life today, and the most chips at the end.

Do you have a financial advisor?

• Joe Weiland is managing partner at Arlington Financial Advisors in Santa Barbara.