A Financial Advisor's job

WRITTEN BY: Gideon Drucker, CFP® AIF® ECA

A financial advisor’s job is not to beat the market.

A financial advisor’s job is to utilize all of the different areas of your family’s finances (cash flow, investments, insurance, estate planning, tax optimization, and goal setting) to create more financial wealth for your family while ALSO giving you back more of your time, energy, and attention.

These are two different things. One is about the performance of an investment portfolio & the other is about the total amount of wealth created for your family.

A simple way of showcasing which one matters more is the following question:

Would you rather earn 8% in your managed portfolio and have $5mm of total wealth in 20 years or would you rather have earned 6.5% in your managed portfolio and have $7mm of total wealth.

This simple question should illustrate that investment growth is just one of the many tools that a great financial advisor will use to help you grow your wealth...it can be a means to greater wealth, but it is not wealth itself.

(This is not to say that you have to pick one or that they’re comparison…it’s just to illustrate a point.)

When I deliver financial plans to clients we typically don’t even start making recommendations as to your investments until about 90-120 minutes into our Delivery Meeting (and this comes after 2-4 agenda setting & data gathering calls). There is a reason for this…it’s that investment planning is just one small component of a comprehensive financial foundation.

I'll take it even one step further. Wealth is not JUST the money (dollars and cents) that a financial advisor saves you. Instead, there are actually 4 areas of life that require "investing" in:

Your Money
Your Time
Your Energy
Your Attention

A great financial advisor will allow you to earn a real return on all 4.

Put more plainly: Our job is to create more TOTAL wealth for your family….this means more money in total (not just via investments) but it also means allowing you to spend more of your time, energy, and attention however you damn well please.

That is true value.