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The Fog of Financial Advice

The world of Financial Advice is foggy to most; intimidating to some. As professionals caring for the financial livelihood of our clients, it's our responsibility to help our clients see their path to independence clearly.

People tell me all the time that someone called them and said, "I've got something HOT for you!". They also often tell me later that it wasn't so hot. This makes me cringe. 

So how do we know what's right, what's true and what's best for each client, each business, and each family? Let's start by talking about the different roles within the financial profession.

It's confusing to separate the titles financial pros have for their practice. There are basically three categories:

  • Broker
  • Financial Advisor
  • Financial Planner

Let's start with Brokers. Brokers sell investment products, most famously stocks for example. They typically charge a commission for executing the purchase of that stock. There is rarely any guidance in the overall impact that stock may have on your portfolio as a whole.  Hopefully, the stock goes up. Either way, they take their fee for executing the trade.

Matt on the Financial Fog

If you need to move out of that stock to another or another product, they get paid a commission fee for that as well. It's a good business model for the broker and their firm, but not necessarily for the client. Rarely is there any substantive discussion or consultation about your overall plan to achieve financial independence. 

Now let's look at Financial Advisors. Advisors take a look at your assets as a whole and give their advice as to what might be missing and what might not make sense for your portfolio. They may or may not help execute the adjustments consistent in that recommendation. 

What you get as a client is a more comprehensive assessment of your overall financial portfolio. Often, however, the client must engage other professionals to achieve the recommended balance in the portfolio. Consequently, the client must oversee all the people they have contributing service as part of their team. This can be daunting for many clients.

Additionally, there are often product loyalties advisors are obligated to due to the firm in which they practice. We see this often in annuities as an example.

Lastly, let's look at Financial Planners.  Financial Planners take all facets of your life, or your business into consideration when designing your Financial Plan for achieving wealth and financial independence, as well as securing, sustaining and protecting the assets on which you rely.

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We feel the right approach to growing your assets, lessening overall risk and earning power, limiting exposure to taxation, fees and penalties, and sustaining a lifestyle you've come to expect begins by getting to know you, your family, your business and all the things that make you unique. It begins with communication.

Asking the right questions, listening and learning about each client, and understanding the client's desires, concerns and thoughts is paramount. It all starts from here.

A balanced approach to the growth, protection and sustainability of financial livelihood requires a multi faceted set of skills and expertise. Financial Planners build a team of specially talented professionals in each area of need. They then coordinate all aspects of proper management of the client's plan.  

This relieves the client from the responsibility for managing professionals who are a part of that team. That should be the responsibility of your Financial Planner, not you.

Independent Financial Planners such as those at BJL, have access to all products, not a loyalty to certain ones. Thus the client has a much wider range of choices available to them. The Financial Planner creates the strategy, designs the plan and executes the management as well as the oversight of all aspects of the plan. They educate the client as to the thinking behind the plan's design. They understand how each client's expectation for being educated may differ and they devote the the time and effort, client by client, to make sure they are comfortable and informed.  There are certain times and certain clients for whom commission based products may make sense

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Planners don't fit clients into products. They select from all options, the most suitable for that client. The result is:

  • The right plan.
  • The right people.
  • The right protection.

The right plan.

We hope this helps you see through the fog a bit better. We are here to help you achieve your goals for a rich and healthy lifestyle. It is truly our privilege to serve our clients on a daily basis. That's the energy that drives our firm.

Thanks for taking the time to visit us.