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Dear Pete,
My husband and I have a financial planner, but we haven’t met with him for about five years. I’m insisting to my husband that we need to go see our planner to get and give updates, but I’m meeting some serious resistance. He reads your column, and he agreed to let me email you. Could you weigh in on our debate? For what it’s worth, both our jobs and incomes have changed, we have three more kids, we’ve moved, and we’ve inherited my father’s estate.
—Maggie, Carmel
Those simply aren’t enough monumental events to trigger a meeting, Maggie. Neither of you has even been to the moon or invented Dogecoin. I’m kidding, of course. And I’m also panic sweating for you.
This isn’t about me, but I’m in a bit of a pickle here. I need to both illustrate how badly you’ve mishandled the last five years and still maintain cordialness so you might follow my guidance going forward. Therefore, I’ll rip the Band-Aid off. You listed nine instances in which you should have reconnected with your financial adviser. You are zero for nine.
Your lack of urgency around meeting with your financial planner is likely the byproduct of a couple of possibilities, and both are rather common. The first possibility is, you don’t work well with your particular financial planner. The problem could stem from anything from a personality conflict all the way down to simple incompetence.
The incompetence possibility is a bit more nuanced than you might think. If your financial planner is not able to show you the value of meeting on a regular basis, I’d argue that’s incompetence. Why am I so confident in this assertion? Because you had nine distinct reasons to meet over the last 60 months, yet none triggered a meeting.
Of course, the other possibility isn’t that fun to talk about. Maybe you’re incompetent.
“Pete, IBJ subscriptions department is on line 1.”
Awkward.
Stick with me for a second, please. I’m suggesting you might not understand what a financial planner does, as opposed to an investment adviser. It’s easy to conflate the two roles, especially given that most financial planners and investment advisers want you to conflate the two concepts.
Most investment advisers I know are more than willing to do a financial plan for you, as a value add. And most financial planners want to manage your investments, too. Yes, financial planning and investment advising are related, but they are not the same thing. Nor are they interchangeable. At the risk of oversimplifying, a financial planner—among other practices—tells you how much you need to invest, and an investment adviser tells you what to invest in.
Consider your nine major life events (two job changes, two income changes, three kids, new home and an inheritance). All nine of those events affect your financial plan significantly. The job changes trigger discussions about benefits coverages and retirement plan rollovers. The income changes trigger discussions about life insurance, disability insurance, retirement contributions, taxes and your household budget. Each of the kids’ births requires discussions about life insurance, child care funding, taxes and college planning. The new house affects your life insurance, emergency fund, taxes and your retirement strategy.
The inheritance?
Oh, come on. You really didn’t think receiving an inheritance justified a meeting with your financial professional?
Do you see why I panicked on your behalf?
Maggie (and Mr. Maggie), you need to have an honest conversation about why you didn’t bother to meet with your financial planner, and you need to promise to never make that mistake again. There’s no doubt in my mind that you’re in a worse financial position than you should be in.
There is another element to your reality that is worth acknowledging. It’s likely that you predicted any satisfaction you’d feel by updating your financial planner wouldn’t exceed the effort to set up the meeting. I can relate. The feeling I get after going on a run far exceeds the effort it takes to put on my running shoes. Yet, time and time again, I choose the status quo and sit on the couch.
My gut tells me you’re incredibly underinsured, your possible retirement date is different from what you might think, and you’re botching the opportunity the inheritance has presented.
The good news is, you can address all these challenges and more, with a simple call to your financial planner.•
__________
Dunn is CEO of Your Money Line powered by Pete the Planner, an employee-benefit organization focused on solving employees’ financial challenges. Email your financial questions to askpete@petetheplanner.com.
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