Lately, I've been writing about the "sandwich generation"- those who care simultaneously for their growing families and aging parents. I'm also a sandwich generation member, so I know the difficulties associated with providing for your family and planning your financial future simultaneously. Unfortunately, I have found that financial professionals aren't as devoted to taking care of their sandwich-generation clients as perhaps they should be.
Do you have a financial care team?
You probably wouldn't try to do knee surgery on yourself by watching a video or reading a book, would you? Well, it's the same when it comes to finances. You need a trustworthy, competent primary care money doctor to guide you in fortifying your financial kingdom. After all, the best advice in the world is useless unless deployed and implemented correctly.
Your primary money doctor must be someone who will listen to your story, your wants, and your needs and make recommendations accordingly.
Depending on your circumstances, your primary money doctor will either propose a solution or send you to a specialist with advanced knowledge, such as a CPA, Medicare expert, or estate planning attorney. Many of my clients benefit by having several advisors on their financial health team rather than a single planner. In this way, they can profit from multiple sets of eyes reviewing their decisions and making recommendations.
Your annual financial fitness checkup.
Most pre-retirees and retirees realize the benefits of an annual medical checkup, especially as they age. Exams can spot minor issues that, left untreated, can threaten your health and well-being. A yearly checkup also reassures you that you are doing everything possible to optimize your health.
Some don't fully grasp the power of annual financial checkups and the need to be vigilant in reviewing and adjusting their portfolio. They tend to take a more "set it and forget it" attitude toward their money. Others won't contact their financial planner unless there is a problem or they experience a life-changing event such as marriage, divorce, or the birth of a child or grandchild. However, as we enter a period of financial uncertainty and potential market instability, more sandwich-generation people realize they need a money doctor to quarterback their planning and keep them on course.
Profile of an effective money doctor
As you read this, you may wonder what to look for when adding a money doctor to your team. You'll want to work with someone whose values align with yours and who listens to your concerns thoughtfully. Of course, "chemistry" is critical. Beyond liking your potential money doctor, you should also consider a few other traits that top financial health advisors share.
- They have stellar reputations, online and offline. Even if your money doc is referred to you by a friend or family member, you still need to do your homework and check them out. Do they have a strong, positive online presence, or is it difficult to find anything about them? Do they have a demonstrable record of success? Do they act in a fiduciary capacity, or are they driven entirely by commissions?
- A money doc has the right stuff. No matter how friendly and pleasant your advisor may be, they must still have the right combination of experience, education, and skills to achieve your money goals. Ensure your money doc has access to the right mix of products, tools, and services to deliver results. Look for professional credentials, specialized training, and a commitment to continuing education.
- Money docs are holistic in their approach to planning. Developing sound retirement income strategies comes from considering more than income levels and risk tolerance. Your financial doctor must take time to understand your entire money situation. To develop a meaningful process, your advisor must look into your banking, investment, and insurance needs and get a clear picture of your debt issues, goals, and spending habits. The most successful advisors consider not only WHAT you want your money to do but also help you clarify WHY that is important to you.
- They are part of a team. An excellent money doctor is a person who knows what they don't know. Say you had a complicated tax situation that was a little above the pay grade of your primary money doc. Wouldn't you want someone with enough honesty and integrity to admit they don't have all the answers and who will refer you to a specialist?
Summing it up: If you are a pre-retiree or retiree from the sandwich generation, it's easy to get overwhelmed by money issues. For this reason, finding a competent, honest advisor to act as your money doctor makes sense. Money doctors work with you, helping craft a plan that reflects your attitudes toward risk, wealth accumulation, debt, and other critical aspects of retirement income planning and wealth management. A professional money doctor will always put your interests above their own and isn't in business just to make the most commissions.