A Few Stories

A Few Stories

April 12, 2022

                A plumber fixes your pipes. A doctor provides lifesaving medical care. A mechanic makes sure that your car is running smoothly. However, what does a financial advisor do? I have gotten this question more times than I can count but people who have never worked with an advisor before. One would think that the answer would be simple. Just like the other occupations that I mentioned, I should be able to state what I do simply and clearly, right? Well, for starters I could talk about how we spend hours building client portfolios and staying educated on what is happening in the market. I could talk about how we conduct client meetings and reviews of corporate retirement plans. I could even talk about the resources that we have available for online learning and education. However, none of those things truly encapsulates everything that we do for our clients. In part, this is because we have many different clients who have different needs and concerns. The other reason is that we do not offer a tangible service. When you hire a plumber, your facet stops leaking. When you go under the knife for surgery, you regain your health. When you pick up your car from the mechanic, it once again runs as it should.  However, when you work with a financial advisor you are often looking out across decades in the time to a far off future when you hope that your goals will be realized. The immediate effect of working with an advisor does not have the same instant gratification as other professions.

                That said, the best way for me to explain what we do as advisors is by the use of stories. Real life examples of the value of financial advice for real people! In this week’s blog, I would like to share with you a few stories of clients that we have been able to help and the situations that we found them in. Of course, I have removed their names for privacy reasons.


All fees, no service

                Last year we were referred to a new client by a professional contact. We met with the clients at their home and took a look at their statements from their prior advisor. What we found was, sadly, all too familiar. The advisor had invested 100% of the client’s money in a basket of indexed ETFs that all tracked different market indexes and overlapped several times in the process. There did not seem to be any rhyme or reason to the fund selection and the portfolio had well underperformed as a result. This by itself may have been salvaged had the advisor been providing additional advice and planning services. Again, sadly, they were not. The client had not spoken to the advisor in over two years during which time the advisor took a fee for their “service” or lack thereof. The solution in this circumstance was quite simple: actually do the work to earn the fee that the client is paying. We helped the client build a portfolio that fit their needs and worked on a plan to prepare them for their future retirement. We communicate with them frequently and meet annually to make adjustments to the plan as needed. This particular case gave us a low bar to trip over.


A good problem to have

                Part of being an advisor is addressing issues as they arise throughout the year. This means being in regular contact with our clients and having a good understanding of their current situation. However, sometimes problems arise that surprise us and we need to act quickly to remedy them! One particular issue that we ran into at the end of last year was a good problem to have indeed. Our client came to us and requested to make an additional contribution to their Roth IRA. However, upon further inspection, we discovered that they had had a very successful year professionally which resulted in them making much more money than the year prior. This meant that the way in which they made retirement account contributions got a bit more complicated. It also meant that the contributions they had made for 2021 had to be recharacterized in order to avoid a hefty IRS penalty. Thankfully, we were able to get this done before tax time and the client saved a significant amount of money in IRS penalties.



                We recently met with a new client who was just starting to think about retirement planning for the first time. The client had worked at the same company for many years before moving to a new company where their pay had increased dramatically. Now they wanted to know if they had saved enough thus far and what they needed to do moving forward. After reviewing their financial situation, we found that they had done a fantastic job of putting away funds in their company 401(k). We created a retirement income plan for them and found that, with continued contributions, they would very likely be able to achieve their retirement goals. This put the client’s mind at ease knowing that they were on the right track. Moving forward, we will connect with them frequently to make sure that they are still on the right path.


Every client is different but our goal is generally the same. How can we help our clients become better stewards of the resources that they have been given? Every client receives a different answer but the outcome is the same. It is immensely gratifying to work with our clients to solve problems and improve their financial condition!


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All investing involves risk including loss of principal. No strategy assures success or protects against loss.