The past month or so have been quite volatile with the recent failures of several regional banks include Silicon Valley Bank. While things have seemed to stabilize in the past couple of weeks, it did serve as yet another reminder that the world of finance can be a scary one. For that reason, knowing you are working with a financial advisor who understands it better than you do can be a source of comfort that is in my opinion, worth far more than the fees you may pay to them. Perhaps that is why a 2021 study from Herbers & Company found those who work with a financial advisor tend to be happier than those who do not.

After all, the subject of money is by its very nature one that stirs up great emotion in people.  I believe most human behavior is at its core dictated by either an internal fear of not being enough, or a fear of not having enough. Money has the ability to trigger both of these innate fears.

Generally speaking, while fear is an excellent catalyst for motivating someone to take action, the decisions made out of fear are rarely the right ones. When making decisions that can impact you financially for decades to come, it’s important that you are making them with a sound mind and with a sound understanding of the mitigating factors that could impact the results you get.

That is where I believe financial professionals can really help people the most. Too often the average person’s goal when hiring an advisor is to simply to find someone they believe will get them the best performance on their investments. While certainly investment management is a piece of the puzzle, I would argue it’s not the biggest piece. I say this because more often than not, the market will do what it is going to do, and if you are invested in a diversified portfolio that aligns with your own personal risk tolerances the difference in performance will generally not vary greatly from one manager to another. With that being said, I do believe certain strategies of investing can help to protect your hard-earned money. Particularly during volatile markets like we are in now.

However, what I believe plays more of a role in your long-term financial success is the quality of the plan you put in place, and the discipline you have in following it. In both of these elements, an advisor can play a key role. In developing the plan, an advisor can help identify what your goals are, and help you execute the strategies needed to reach them. Then, through regular communication and support, can assist in insuring you are sticking to your plan and avoiding any obstacles that might cause your plan to fail.

According to a recent study by Ernest and Young, only half of all clients who work with an advisor utilize these types of planning services. In addition, only approximately 25% discuss budgeting and saving with them. With this lack of total engagement and partnership between advisor and client, it’s no surprise that many clients find themselves changing advisors regularly.

Unfortunately, this constant bouncing from one advisor to another keeps the advisor and the client from ever connecting at the level they need to, because the kind of close relationship I am describing does not develop overnight. It is an invaluable part of the financial planning process however. You, as a client, must be willing to share all elements of your financial life with them, and they, as the advisor, must be willing to devote enough of their time with you that a level of trust and confidence is built.

Can you without hesitation say you have this kind of bond with your financial advisor? If not, why not? Part of what your financial advisor should be providing is a sense of security and peace of mind that you are not alone in building and protecting your wealth. If you are lacking this close relationship with your advisor, now might be a perfect time to schedule that next meeting with them to really try to start building it. I have no doubt you will sleep better at night, knowing you have a partner that understands, and cares about you, and is doing what they can to help you reach your financial goals.