We understand. Personal Financial Planning or investing in the stock market can be ambiguous, uncertain, and stressful. You could follow a DIY (Do It Yourself) YouTube video to remove your toe or fly an airplane but what happens when you can’t stop the bleeding, or the weather turns dangerous? You should be working alongside an experienced professional to ensure your financial wellness.
The guidance of a CERTIFIED FINANCIAL PLANNER™ can be life changing. Your Financial Planner can help you achieve higher investment returns and explain your investment strategy, as well as help you gain confidence when managing your financial future.
The worst mistake is to wait. We all know how the narrative goes. You will wait to contact us when you get a bonus or will postpone investing until your next major life event. Unfortunately, history suggests this is time wasted that your money could be working for you (and your peace of mind).
If you’re a client of the firm, you have heard this next analogy. In medicine, it is never too late to stop smoking cigarettes, similarly it is never too late to start working with a financial professional. Many of our newer clients’ only regret is not starting with us sooner. Stop the poor results and get started now.
I can promise from experience that investment results have little to no correlation with your total IQ score or how smart you are. If you are still unsure about working with a Financial Advisor, we’ve outlined below what our clients have told us (and we’ve seen to be true) – The Top 4 reasons on Why You Need a Financial Advisor.
1. Set and Track Meaningful Goals
Americans right now are not doing a good job of working toward their financial goals. Recent data from the Federal Reserve found that the median retirement account balance in the United States was $65,000. Using the industry standard Four Percent Rule, this would generate around $216 per month in supplemental income.
Like your New Year’s resolution, it’s easy to get off track when you’re trying to do things by yourself. People hire fitness instructors to hold them accountable and keep them motivated for a reason. It helps improve outcomes. In a way, your Financial Advisor or Wealth Manager is your personal financial trainer.
Your Financial Advisor will work with you to understand your full financial picture and then set a plan of action to achieve your goals. Saving for retirement, a new house, a wedding, or your kids’ college education can seem unattainable at first glance. How much do I need and when? Your Financial Advisor will articulate your plan while keeping the big picture in mind to eliminate poor short-term decisions.
2. Eliminate Emotional Investing
You work hard for your money, you’re passionate and have an emotional connection to those dollars earned. Emotions mixed with investing can lead to financial disaster.
The Great Recession (2007 – 2009) is a good example. According to a Vanguard study of more than 58,000 self-managed IRAs, individual investors who made changes to their strategy just once from 2008 through 2012 suffered at least an -8% loss on their investment performance vs. a benchmark indexed strategy.
Your Wealth Manager would be there to remind you to stay patient and leave your investments alone so you can participate in the subsequent Bull Market to follow. Conversely, they would have advised adding to underperforming asset classes with extra cash flow.
Even if you follow the markets and understand them, trying to time the market presents little to no benefit. According to Morningstar, many investors achieve lower returns than the actual mutual funds they invest in because they unknowingly sell low and buy high. How? They buy in after the mutual fund has done well and sell other funds right before periods of outperformance.
Your CERTIFIED FINANCIAL PLANNER™ is a third-party, unbiased professional whose Fiduciary Duty is to guide and coach putting your best interests ahead of their own. They can help you eliminate the risk of behavioral investing from impacting your financial results.
3. Earn Higher Returns
It’s natural to want to make more money. I think it’s safe to say we all do, which explains the behavioral investing phenomenon. You want to do whatever you can to maximize your investment returns. We would advise not to focus much attention on the annual management fee (if its reasonable – say 1.00% or less).
Would you want your general surgeon operating for free or your employer saying we are going to reduce your salary? How motivated would you feel to perform at a high level? Instead, focus on the fact that you’re making an investment in your future—in your family’s financial future.
A study by Russell Investments estimates that a good Financial Advisor can increase your returns by +3.75% annualized. In addition, 44% of people who partner with an investment professional have $100,000 or more saved for retirement versus just 9% of those who fly solo.
These higher returns compounded will far outweigh the 1.00% annual management fee. Your Financial Advisor will increase your probability of an early retirement, portfolio longevity, enhanced lifestyle, generational wealth and help achieve the acronym FIRE (financial independence, retire early). Watching your account balances grow can help motivate you to continue saving and investing for your future.
Markets can be incredibly volatile and none of us our invincible to the emotions of greed. You must stay humble and full-time market research is required. It’s best to leave the work to the professional while you do more of what makes you happy.
4. Financial Health & Wellness
No matter your age, financial health is important to help you achieve your investment and savings goals. You can ask any Millennial (Age 25 – 40) with student debt or anyone who as lost their job because of the COVID-19 pandemic. Having an established Financial Plan can help you stay on track toward long-term goals during a global pandemic or market recession.
A survey from Bankrate shows that only 40 percent of Americans are able to pay an unexpected $1,000 expense, such as a car repair or emergency room visit, from their savings account.
Your Financial Advisor can help you develop healthy financial habits and provide education on the pillars of financial planning and wealth management.
- Cash Flow and Debt Management
- Retirement Planning and Investment Strategies
- Finding the right combination of Insurance (Life, Disability, Home & Auto)
- Tax savings and Withdrawal strategies
- Fund an emergency plan
- Start an Estate plan (Will, Trust, DPOA)
- Education Planning and Employee Benefits
Take the first step toward achieving your financial goals by finding the right Financial Advisor. At Aventine Financial Group LLC we believe the best way to offer wealth management services is by building trusting, authentic relationships. Our clients are family.
As our relationships with our clients grow, we are never surprised to learn that they wish they had started sooner. They report less stress and more freedom in their financial and personal lives and have referred their family and friends to our practice.
If you are interested in learning more about financial planning services using a CERTIFIED FINANCIAL PLANNER™ Contact Us to schedule a call. We look forward to helping you Plan, Protect, and Grow your net worth. Now is the time to get started and take the first step towards creating a stronger, wealthier New Year!
Frank J. Fiumecaldo, CFP
Founder & President