For many of us, personal finances are a largely taboo topic. In fact, according to research, over 60% of Americans say they simply don’t discuss money — even with family members (63%), friends (75%) and their own spouses/partners (46%).
Just how reluctant are we to broach the topic of our financial situation in conversation? According to the same research, more of us would rather talk about politics (43%) and death (32%) than our own finances (24%).
A professional consultant on money matters with a need to know
While this aversion to “money talk” may not have substantial impacts in most areas of our lives, when it carries over into conversations with a financial planning advisor, it can put serious limitations on the ability of this professional to perform his or her job well. A financial advisor is trusted to help us achieve a range of personal financial goals — from building savings and planning for retirement to properly handling an inheritance, ensuring adequate insurance coverage, building a balanced investment portfolio, managing financial risks and much more. But this professional simply can’t be expected to deliver effective financial guidance when he or she is kept in the dark on certain money-related matters.
8 things you should be telling your financial advisor
So just what does a financial advisor need to know? These money-management professionals can better help you achieve your financial goals when they’re well-informed about your finances, your job, your family, your passions, your goals … and more. So the more open and honest you are with them, the better — even (and often especially) when it comes to sometimes-uncomfortable personal topics.
To help ensure that your financial advisor has all the information he or she needs to give you effective advice and guidance about your personal finances, don’t keep the following eight things — all of which can have big impacts on your financial situation — from your financial advisor:
- The financial facts … in full — When you begin working with a financial advisor, he or she will likely ask that you provide a broad range of information and documents related to your personal finances. The details requested may be more comprehensive than you might expect, and they could include everything from tax returns and account statements to income details, asset information and debt details. Be ready to share all the information requested — and don’t be surprised if, for example, you’re asked to provide much more than your 401(k) statement, even if you’re only seeking retirement advice. From the advisor’s perspective, the more complete the financial picture he or she can get from you, the better equipped he or she is to help you create a plan that’s adequately diversified and set up for success.
- Your money-related goals, personal values and passions — The financial goals you’ll likely be asked to share will dig deeper than “I’d like to build more savings” or “I’d like to ensure a comfortable retirement.” Most advisors will want to get the details behind those goals and what drives them. Be ready to be asked about things like what people and things are most important to you, how you’d like to spend your life after retirement, and what financial issues/concerns have you most worried. Further, by learning what your driving values and passions are, a financial advisor can get to know you better as a person, which can add color and shape to the financial picture he or she is able to assess, as well as to the financial guidance he or she provides to you.
- Your family — Your family structure and dynamics — and especially any potential or existing family-related issues — can play an outsized role in your financial fortunes and decision-making. Some of the family-related matters it may be a good idea to share with your financial advisor, even if they’re difficult to discuss, include:
– if your marital status has recently changed or may soon be changing
– if you have children from multiple relationships, where these relationships stand now, and how you anticipate they may look in the future
– it you have any family members with physical or mental health challenges (a substance-abuse disorder or other diagnosis, for example) that currently requires or may in the future require substantial care costs
– if you have any estranged siblings or other estranged members of your immediate family
- Your health — Your current health status and any health problems you may be subject to in the future — as well as the current and future health outlooks of your immediate family members — can also have big impacts on your financial well-being, both now and into the future. Some of the health-related topics you may want to discuss with your financial advisor include:
– if there is a history of chronic illnesses in your family
– if your parents are still alive, what kind of health they’re in and if you may need to provide care for them at some point
– what your plans are for covering your future healthcare needs
– who you expect will provide care for you if you need extra assistance as you age
– what your preferences for long-term care may be should you need it in the future, as well as where you plan to live as you grow older
- Your career — Your career path, opportunities for income growth and any potential threats to your primary source of income can all have big effects on how your finances should be managed and any big financial moves you may choose to make. Be sure to keep your financial advisor updated on any potential changes at work (especially if you plan to make any career changes), how you feel about your chances for promotion at your job, if your employer-provided benefits may be changing, what you would do if you lost your job, etc.
- Your money-related experiences — A person’s attitudes about money, saving and spending often get established early in life — so don’t be surprised if your financial advisor inquires about some of your earliest memories and experiences related to money. Further, by knowing about your past experiences with money and investments, a financial advisor can help you overcome any money-related biases you may have and educate you about any financial misconceptions you may have. For example, a client may have lost money on a past real estate investment or had bad experiences with the stock market that could drive an aversion to making similar financial moves again. And by knowing about these experiences, the advisor can better understand your perspective … and get a better idea about some areas that you may need to be better informed about.
- … and your money-related mistakes — Most all of us have made financial missteps, such as spending years on a job before taking advantage of our employer’s 401(k) plan or failing to adequately deal with our credit card debt. Don’t be embarrassed to share details about your past financial mistakes with your financial advisor. First of all, he or she has likely seen such financial blunders before — and knowing about them can help your advisor steer you clear of making them again. Further, the advisor needs to know about any issues like substantial debt to help you address them and help create the best financial outcomes for you moving forward.
- Your financial decisions, both big and small — Most financial advisors are willing to offer you guidance on any money-related decisions you may be facing, no matter how large or how small they may be. So if you’ve got financial questions, don’t be afraid to ask them. Whether you’re looking for advice and insights related to a vehicle purchase vs. a lease, potential health-related expenses, whether you should loan money to a close relative, or anything else in which money considerations play a role, in most cases, your financial advisor will be happy to help.
Would the guidance of a professional financial advisor help you achieve your personal financial goals? At Arthur State Bank, our trust and wealth professionals are highly trained in a broad range of financial matters, and they’re eager to assist in the careful planning process typically needed to make clients’ long-term financial goals become a reality. To connect with an Arthur State Bank financial advisor who can help put you on the path to achieving your financial goals, contact us today.
Proudly serving South Carolina since 1933, Arthur State Bank offers accounts and services to meet a variety of financial needs. To help you achieve all your financial goals, the bank offers in-person service as well as a range of convenient digital solutions. To learn how Arthur State Bank can help you with banking needs ranging from checking and savings to retirement accounts, mortgages, other personal loans and more, visit arthurstatebank.com.
