Training Your Wealth


Great wealth advice should cost you much less in the long term than no advice at all. Not all advisors are the same, but if you do find a great one, it’s important to think about the overall value they can provide when considering costs.

A Great Workout

Hiring a wealth advisor depends on your specific financial needs. The decision to hire a wealth advisor could free up valuable time, slash stress levels, and potentially gain tens of thousands of dollars in otherwise untapped after-tax income.

Hiring experts to increase performance is not exclusive to wealth management.  In fact, many liken wealth advisors to personal trainers. In the gym, your trainer bears the burden of planning – you state your goals, the trainer takes them into account and comes back with a plan to achieve them. When you’re having trouble understanding an exercise, they’re available for guidance. Struggling to remain accountable to your goals? Your trainer is there to keep you on track.

A wealth advisor serves a similar purpose. A great advisor will listen to your goals and come back with a plan to meet them. When you’re struggling with what to do next, your advisor can guide you with clear recommendations and push you to stay on track.

Research has concluded that in 73% of cases, a personal trainer works to dramatically increase motivation and commitment to fitness goals. Similarly, an advisor can help educate, hold you accountable, and reaffirm your commitment to your wealth goals. Just like a personal trainer can jump-start your results in the gym, the right advisor can help you build and grow your wealth.

The benefits of hiring the right advisor are also intangible. Peace of mind, for example, is impossible to quantify, yet its value can be of even more impact than increased investment performance. How much would you pay for financial freedom? To not worry about whether you’re spending enough time on your portfolio? How much is that worth? 

Hiring Experts Is Not Only For Novices

Some might see paying for help as a sign of lack of expertise on the subject, but that is far from the truth. Do Lebron James and Dwyane Wade train on their own? I mean, these guys are the epitome of fit. No, they both hire Tim Grover to be their personal trainer. Why? Because they understand the value of specialization. Why spend 20 hours vetting what the best strength routine is when Tim has spent 1,000 hours perfecting one?

The Hidden Costs of Going It Alone

While it may seem that handling your finances personally can save you money, this is only partially true, and often only in the short term. Without expert guidance, there’s a high likelihood that you’re leaving money on the table. A recent study: Allied for Life Income Protected Retirement Income and Planning (PRIP)found that 73% of the respondents who work with a financial advisor believe they will be able to cover their retirement expenses with their retirement income and savings, while 36% who don’t have a financial advisor think otherwise. Sure, you may save on fees today, but you’ll potentially pay much more in lost income in the future.

Additionally, a study by Vanguard suggests that a good wealth advisor can add as much as 3% net returns to your overall portfolio. The additional returns are not driven by “beating the market” but rather by helping you to avoid the usual behavioral-bias-driven investment mistakes and by helping you to implement a cost- and tax-effective strategy.

Personal wealth planning also incurs a massive time cost. If you choose to forgo expert guidance, you may pour hours upon hours into research and implementation. Unfortunately, unless you’re a retired institutional investor, these hours could be a waste. Constructing a well thought out financial plan and executing with the right products is not as easy as it sounds. Take the example of painting a house. With some time, you could learn how to do it yourself, familiarize yourself with the techniques, and purchase the necessary equipment. On top of that, though, is the huge allotment of time to actually paint it. What other, more valuable, activities are falling by the wayside as a result? The time value of financial advisors is similar. A great advisor becomes your household CFO, which allows you to focus on doing what generated your success in the first place, as well as free up time to spend with loved ones.

Hitting The Gym

Of course, it’s ridiculous that we have to hire a trainer to force us to work out – we have to pay someone to keep us at the gym! But it is what it is, and you are certainly not alone. The same applies to a wealth advisor. We all have busy lives. We are pulled in a million different directions all day, every day. Hiring an advisor will not only help you feel less stretched (and stressed) but it can actually increase your wealth, and allow you to achieve your goals. Having a Personal Wealth Trainer can allow you to live the life you want.

If you enjoyed this post, check out You’re A New Person Every Year.

Disclosure: This blog is original content by Zoe Financial. It is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accounting, tax, legal or financial advisors. The observations of industry trends should not be read as recommendations for stocks or sectors.

The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for accounting, legal, or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

The views expressed are those of BerganKDV Wealth Management. They are subject to change at any time. These views do not necessarily reflect the opinions of any other firm. Investment advisory services and fee-based planning offered through BerganKDV Wealth Management, an SEC Registered Investment Advisor.

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