I have watched many documentaries on climbers attempting to summit Mt. Everest. Though I can say I do not have a strong desire to make the attempt myself, the history and stories of the climb still fascinate me. One theme throughout many of the Everest stories is the value of the Sherpa people. They have helped thousands of climbers navigate the treacherous slopes of Mt. Everest. As I watched yet another documentary on Mt. Everest and the Sherpa people, it made me think of our own role as financial planners. At Stewardship Advisors, we feel the best financial planners should act as a guide in your “life story,” not as the “hero,” that is your role.
Though the term financial planner has been around a long time, a financial planner today is very different than 20 or 30 years ago, or at least they should be different. Historically, our industry has been about “selling something”, initially it was individual stocks, life insurance policies, annuities, then it moved to mutual funds and diversified investment portfolios with ETF’s. People called themselves financial planners, but they were really salespeople trying to earn a commission. Inherently, there is nothing wrong with this way of doing business, however, it is my belief that investments have become a commodity and a financial planner’s value is not in picking the best stocks, bonds, or ETFs. Rather, our value as a planner is in helping people achieve a high level of financial satisfaction and offering advice for the many transitions that someone experiences in their life. Those transitions can cause major financial problems both at the time of the transition and in the future if they are not handled correctly.
Do not get me wrong, building a solid, smart investment portfolio is still a very important part of a financial plan, just like choosing the best type of life insurance or car insurance is important. However, in our current information and technology age, building a portfolio has become very efficient and costs have continually declined. For many years Vanguard has touted their low-cost investment portfolios, and Betterment will build you a portfolio and rebalance it for you at a cost of 0.25% per year. However, what is interesting about those two service providers, is that over the last few years they have added something else to their service offerings, for an additional fee, access to a financial planner. Why? Even the “Robo-advisors” realize they have limitations when it comes to truly helping people navigate life’s financial complexities. We often tell clients; “our job is to reflect to you with clarity your financial situation so you can make wise financial decisions.” No robot is going to do that for you.
Something else we have recognized is that financial planners assume that everyone has spent a lot of time thinking about their financial or lifestyle goals. Meet with many financial planners and one of the first questions they ask is, so tell me about your goals? Most people respond with something that they feel they should, retirement, saving for a house, saving for college, etc. While those are fine goals to achieve, we have found that many people want more than just those goals, but they sometimes have a hard time articulating their vision of the future. So, in our role as a guide, we have developed a process that will help you craft a compelling vision of your financial future and then we walk with you through life transitions to achieve that future.
I have written about our financial satisfaction survey in the past, but when many prospective clients come to us, it is during a time of transition and often their “scores” on the financial satisfaction reflect that uncertainty. Quite frankly, the best tangible way I can describe what we do as financial planners is to help get you to a point that your financial satisfaction scores “move to the right” and get as close to the “highest score” as possible.
The best Sherpas in the world help people make life or death decisions on the world’s tallest mountain by acting as a voice of reason. They often find themselves trying to help climbers separate the emotion of making a once-in-a-lifetime summit attempt from the reality of the conditions around them on the mountain. Similarly, it can be very hard to separate our money and emotions when making difficult financial decisions that affect your family and your future. A financial planner acting as your “guide” can be that independent voice to remind you about the vision you created and how to best achieve that future.