Are financial fears keeping you up at night? Are you afraid to admit your bad financial habits to anyone? Talking to a financial planner can help—but only if you’re completely open and honest with them about everything. (Yes, even your passion for online shopping.) According to research from the Certified Financial Planner (CFP) Board of Standards, approximately one quarter of Americans receive retirement savings advice from a financial professional, with 88% of those people reporting they’ve benefitted from the advice offered by their advisor.1 These relationships are only going to work if there’s mutual trust. If you leave your planner in the dark about any aspects of your financial life and they won’t be able to do their jobs properly.
Think about it this way: just like a physician will better understand your condition with an understanding of your medical history and current medications, a financial planner will best be able to “diagnose” your money issues once they understand as much as they can about your financial life and decision-making. You’re revealing much more than just dollars and cents. You’re also giving your planner a window into why you make the decisions you do, and how your fears and insecurities may be guiding you. So, sit down, relax, and get ready to break down those walls. Treating your financial planner like your therapist may be the best decision you ever made.
1. Not only is it okay to be emotional, it’s required.
If you don’t have at least a few sessions with your financial planner that require tissues, you’re doing it wrong. Yes, your CFP is managing your money (or guiding you in doing it yourself), but within that framework, they’re also planning your life.
Think about it this way: Your goals to have a second home, take vacations with family, or buy a special gift for your 40th anniversary all require money. When you share goals and dreams with your financial planner, he or she can help develop a plan that may bring them to life. So, go ahead and tell them where you want to be in five, 10, or 20 years. Tactically, sharing all of the information also means allowing your planner to see where you’re falling short—spending too much, borrowing too much... And don’t expect those breakthroughs to happen overnight. Much like working with a therapist, real progress will more likely come after several sessions, once you’re more comfortable opening up.
2. Many couples benefit from an objective third party.
It’s one thing when you ask your spouse how much they’re spending—it’s entirely another when a financial professional takes the reins and asks those questions for you. Removing those feelings of confrontation can help couples expose problems that may be lurking in the dark (say, on a rarely-checked credit card statement). Sometimes you just need someone to play referee between your spouse’s financial desires and your own, putting an end to those “argument loops” that never leave either party feeling like they got what they wanted. When one half of a couple feels their spouse is prying, it can make them shut down even more and share even less, which is why it’s nice to have a financial advisor channel
"If you leave your planner in the dark about any aspects of your financial life and they won’t be able to do their jobs properly ... Treating your financial planner like your therapist may be the best decision you ever made."
3. Singles can use an outside vantage point, too.
Of course, it’s just as important for single folks to get an outside opinion, and shed some light on how well you really know your own finances. Perhaps you believe you can’t afford a vacation when you really can, or it could be that you’re overspending nine months out of the year without realizing it. Once you open up to your advisor, he or she can help you put it all into perspective.
4. Finding the right fit may take time.
Finding a financial planner is a lot like finding—you guessed it—a therapist. Your advisor should be someone you know has your best interest at heart (for this reason, you may want to look for someone who is a fiduciary and is therefore required to put you first.) You want to establish that they listen well enough to truly understand what’s going on in your life, and that they’re going to tell you the truth about your money, even if it’s something you don’t want to hear.
Likewise, if you meet with an advisor and walk away saying anything like, ‘I had no idea what they were saying, and I feel more confused than ever,’ you should immediately look for someone else. A planner who is a good fit should be able to explain complex financial information and empower you in such a way that you not only understand what’s being said, you feel qualified to step into the driver’s seat of your fiscal life. Through it all, a good planner will make you feel comfortable, and if necessary, they’ll keep re-stating things until you’re both on the same page. If you aren’t connecting with your planner, know that there are plenty of other fish in the sea. You’re never stuck with someone who isn’t making you feel good about your future—and that’s true no matter how long you’ve been in a relationship with your planner. Moving on isn’t a bad thing—it’s most important that you’re with the right person for you in the right life stage.
Kathryn Tuggle contributed to this story.
Investing involves risk and possible loss of principal.
The opinions and forecasts expressed are those of the author and individuals quoted and should not be construed as a recommendation or as complete.