Financial Perspectives
Silence Isn’t Always Golden
Your mother may have warned you that it’s impolite to talk about money. While that may hold true at the dinner table, it doesn’t work in your financial advisor’s office.
Americans typically are uncomfortable with discussing money, even with their financial advisors. But open and honest communication, no matter how difficult, is a good idea, since keeping financial secrets will make it harder for your advisor to see the big picture and provide the best advice for your situation.
Consider these topics the next time you meet with your advisor:
- Be upfront, with your advisor and yourself, about how much market risk you are comfortable with in your portfolio. You may have been much more tolerant prior to the most recent recession, but now you’re more hesitant. Your advisor can help put market volatility into perspective in terms of your goals and your overall financial plan – if he or she knows about your fears.
- It’s never easy to talk about a time when you might be incapacitated or no longer here for your family, but it’s necessary and won’t get any easier if you put it off. If you start the conversation, your advisor can help develop a plan and may coordinate with other professionals, such as lawyers, accountants and tax advisors, to ensure all parts of your strategy – from long-term care to estate planning – work in harmony.
- Another hard topic where silence could keep you stuck is debt. Being upfront about the amount of debt you have can be difficult, but don’t let past decisions harm your future plans. Your advisor can help you formulate a plan to get out of debt that makes sense within your overall investment strategy.
- Finally, it’s never a good idea to keep quiet if you don’t understand a strategy recommended by your advisor. Speak up and ask questions until you truly comprehend what’s being proposed. Your advisor is there to explain recommendations, in language you easily understand, and educate you on terms or strategies you may want to consider for your portfolio. Of course, it’s uncomfortable to admit you don’t know what the other person is talking about, but the alternative – potentially agreeing to a higher risk investment than you realize – could be much worse.
- Broaching these conversations can be hard, but a relationship of trust with your advisor is important. You don’t have to have the answers or know the “right” questions to ask; you just have to start talking. Your advisor’s recommendations will be based on what you disclose, so it’s in your best interest to be forthcoming about all details of your financial situation.
Asset allocation does not guarantee a profit nor protect against loss.
Raymond James & Associates, Inc. and Raymond James Financial Services, Inc. are wholly owned subsidiaries of Raymond James Financial, Inc. (NYSE-RJF).
The information contained in this newsletter has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. We may, from time to time, have a position in the securities mentioned and may buy or sell such securities in the course of regular business.