Do you need an investment advisor? Maybe one of the reasons you picked up this book is that you’re not sure about the answer to that question. Obviously, you know what I would say, but what about you? In most cases, I believe your answer should be yes.
Why do you need one?
Are you comfortable with your portfolio? Are you comfortable with (or do you even have) an investment advisor? You may be wondering about how much home to buy, how to plan for your children’s college, saving for retirement, or planning your estate. At each of these important life stages, you need someone without any emotional skin in the game to help you come up with a path.
Suppose someone leaves you a large sum of money? Do you invest it? In what? How much of it? Maybe you lose your job or want to take early retirement. How much money should you take out of your IRA or retirement fund? These are major questions, and you’ll be more confident making a plan with someone who’s dealt with similar situations over a long period of time, good economy and bad economy.
When do you need one?
From the point of view of discipline, you could probably benefit from a very early age. You need that voice of reason saying, “Hey, you don’t need a $35,000 car. Take a look at what this money can do for you.” [1]
You’re never too young for this kind of advice, and you’re never too old. The biggest reason people achieve or don’t achieve in life is discipline or the lack of it. As I’ve said throughout this book, financial security is achieved by regular and methodical investing and holding. If you keep giving in to the emotion of buying or the emotion of fear, the yo-yo of saving and spending will keep going down until you’re pretty close to rock bottom. More money will not magically appear. The right—and I emphasize the word, right, here—advisor can keep you from succumbing to temptation by doing something that sounds very simple but which, in real life, is a little more complex. And that is tell you the truth.
When you are on a rocky emotional cliff, you need someone who can remind you that you are letting your emotions rule, which will remind you why you need to slow down and take a deep breath. Most professional advisors agree regarding the consequences of emotional investing.
● Investing based on emotion (greed or fear) is the main reason why so many people are buying at market tops and selling at market bottoms.
● Underestimating risks associated with investments is one reason why investors sometimes make suboptimal decisions based on emotion.
● During periods of market volatility, investors often move funds from riskier stocks to lower-risk interest bearing securities.
● Dollar-cost averaging and diversification are two approaches that investors can implement to make consistent decisions that are not driven by emotion.
● Staying the course through short-term volatility is often the key to longer-term success as an investor.
Your investment advisor can remind you of the need for someone you can trust, not a cheerleader who makes you feel good. More than anything, you need someone who absolutely tells you, in a realistic way, what you must do. You have to have confidence that he or she can help force you to do what you haven’t done on your own and what you need to do immediately and in the future based on your circumstances. Furthermore, and very important, this person must have a plan and must be able to demonstrate that they’ve executed the plan, so you can have a higher degree of trust that they can do it going forward. Remember, those of us who do this every day and who are deeply invested ourselves live and breathe investing. It’s not a hobby, not something you can sit down on the weekend and do with software, however sophisticated.
So much in the investment business is all about bravado and sizzle. I encourage you to avoid both. Instead, choose an advisor the way you’d choose a surgeon. Finding the right person is not about financial acumen alone. It’s about trust and demonstrating that the person you put that trust in is has done what they’re advising you to do.
[1] Zucchi, Kristina. “How to Avoid Emotional Investing,” Investopedia, Feb. 9, 2020.
At Curran we value service over sales and believe quality service yields happy clients. Below is our 4-step process (the first three steps at no cost to you).
A short introductory call for us to get to know one other. During this call we will discuss your financial goals, concerns and hopes for the future.
In this meeting we will go over your current financial situation, take a deeper look at your goals, discuss your risk tolerances, and collect the data necessary to build a formal proposal.
Based on our data gathering session, our Private Wealth Managers will present you with a custom proposal tailored to your needs. We encourage individuals to take the time to evaluate this proposal.
If you are comfortable with the proposal and choose to invest with Curran, our team will be there every step of the way assisting in opening the recommended accounts and facilitating all necessary parts of your onboarding process.
