What is the biggest mistake people make when it comes to their financial planning?
It’s not what you think.
The biggest mistake, says Rob Gorman of The Gorman Financial Group in Charleston, S.C., is hiring financial experts who don’t fully understand your values and vision.
Help ensure you find the right financial planner to protect your future by looking for these seven characteristics:
1. They understand that financial planning is about people, not finances
Many financial planners get to know their clients’ finances without getting to know their actual clients. At The Gorman Financial Group, Rob Gorman and his team start with a period of discovery to understand their clients’ values, goals and their vision for the future. Only after they have come to understand the “who” and “why” can the Gorman team help their clients determine the “what” of financial planning.
2. They don’t jump right into implementation
Implementation is often the first or second step when working with a financial advisor. But that is way too soon, says Gorman. After the discovery period in which they develop a deep understanding of their clients and their family dynamics, The Gorman Financial Group analyzes finances and educates clients about the opportunities and challenges facing them. Only after those three steps can an individual or family confidently move to implementation.
3. They focus on planning over products
Gorman offers clients the opportunity to enter the financial advising process even if they already have an investment advisor or insurance agent to implement the recommendations. Gorman focuses on the big picture, like diversification and tax strategies, leaving the investment advisor (where applicable) to select specific investment securities. The specific investments are much less consequential than the overall strategy, particularly when informed by the values and goals of the family.
4. They don’t try to control the unpredictable market
Many financial advisors place high value on “beating the market” with investment decisions. But no one can predict equity markets with much confidence or accuracy. Instead, smart financial professionals focus on creating a comprehensive plan for their clients’ that matches their immutable values and goals.
5. They include the whole household
Often when married couples come to a financial advisor, one spouse is sophisticated about financial planning and the other is not. Allowing one spouse to handle all the decisions leaves the other untethered and often anxious. Plus, if the controlling spouse falls ill or dies, the remaining spouse is left to learn everything in the middle of a crisis.
6. They create a cohesive financial plan
Employing an investment advisor, plus an insurance agent, plus a tax accountant, means each of them is operating in a silo. These are all interdependent, so a good financial plan integrates it all.
“It’s like a company having a CFO, COO and director of sales but no CEO or Chairman of the Board to create one cohesive plan,” says Gorman. With everyone working independently, the client is left to coordinate their activities, and most of us are not equipped to do so.
7. They think about the long term
Retirement age people in good health could easily live in to their 90’s, but many people only plan for retirement into their 80's. A good financial advisor understands that lifespan averages work for average people, but not necessarily the client.
Rob Gorman might be the most credentialed financial advisor in the Lowcountry (CLU®, ChFC®, CFP®, AEP®, MSFS®, CASL®) and he is always seeking new opportunities to learn about how people behave, particularly with regard to money. But he recognizes that there is no knowledge more useful than a deep understanding of the values and vision of his clients.