As a child, among the most feared events of the month was haircut day.  These were the days before Supercuts or First Choice Haircutters, and in our home Mom did the honours.  While Mom never pulled out the legendary bowl that seemed to shape the dominant hairstyle of the day (many of you will know of which I speak), she did, however, wield a haircutting device that was pure torture.  Imagine a comb-like device with a razorblade embedded laterally through the centre of the row of teeth and as the comb was drawn through your hair… well, let’s just say the pain was memorable. All that was missing was the maniacal laugh.  I’m certain that this device contributed in no small measure to the Beetles-style of shoulder-length hair dominating that era.

Fast-forward to university, where I met a fellow freshman who had found his escape (I’m sure his parents must have used the same torture device) by becoming one of the new-era DIY’ers…he cut his own hair.  What some guys would do to escape the comb-of-death!  And it makes me wonder if he’s gone on to write his own will, prepare his own taxes, fix his own vehicle…he was very bright, so maybe he’s now even performing his own self-surgery.

There are many sources of financial information. What’s desperately lacking is financial insight.

I wonder if the same ‘fight or flight’ instinct is at the core of the financial do-it-yourselfers.  From my observations, it seemed to peak during the tech boom of the late ‘90’s with the emergence of day-traders, but with the economic turbulence of the last 5 years I sense that it has become much less common-place.

So, do financial planners have a place on your roster of advisors alongside your lawyer, accountant, mechanic and physician?  I would contend they should, and I’d like to offer a few reasons why:

The complexity of the financial landscape has skyrocketed.  Lots of factors are at work fueling this complexity – primarily the aging demographic and its impact on work patterns, government intervention, and the anticipation of a leap in life expectancy.  While not omniscient, your financial advisor will have a better handle on the myriad products and opportunities out there today, and will hopefully be a helpful guide as you navigate a very noisy financial services landscape;

1. Your financial advisor may be the one thing standing between you and a poor decision.  While we’re reluctant to admit it, we are emotional creatures and prone to drawing conclusions based less on fact and more on sentiment.  If there is any part of life that needs an objective, reasonable buffer zone, it’s with our financial decision-making.  There are many sources of financial information. What’s desperately lacking is financial insight, and your advisor should be serving as the voice of reason during turbulent times;
2. Your financial picture is like a triangle with three sides.  Most people will readily discuss their retirement portfolios, but are less inclined to consider the implications of an illness or early passing on their retirement picture. .. and what about when you are done with retirement?   A good advisor will help shine a light on your accumulation of wealth (both short-term and long-term), the eventual distribution of your wealth (throughout and beyond retirement), and reasonable preparation for the risks of death, disability or illness along the way;
3. Finally, the likelihood of financial success is tremendously enhanced if you have and follow a written financial plan.  Oddly enough, my experience has been that clients often need to be convinced or coerced to engage in a comprehensive financial planning process, perhaps believing that it will take too much work or time and is somehow unnecessary.  Good financial advisors will provide a written plan if given the opportunity to facilitate a sound planning process, but it’s a true partnership arrangement that calls for commitment from both parties.  When done, you and your advisor will have a roadmap that will establish your ongoing point of reference for timely and relevant financial decision-making going forward.

There are many more reasons to work with a financial advisor – I’ve just had time and space to hit on four that in themselves should be compelling enough.  Your self-inflicted haircut will grow back in time.  The same can’t be said for your financial decisions.  Seek help from a trusted source.

Remember, if you see a turtle sitting on the top of a fencepost, you can be certain of one thing:  he didn’t get there by himself.

Next up… what to look for in a financial advisor.  Stay tuned!