What is the difference between financial planning and coaching?
Listeners to my radio show may have heard me say that traditional financial planning is the source of much stress in people’s financial lives. Why is this so when it seems so logical to hire a planner to escape our financial difficulties? The root of the problem lies in the way planning is carried out.
First, it is often used as a marketing tool to sell financial products. The reason? Simple! To generate commissions on the recommendations. The individual working with the planner generally has little knowledge of knowing whether the recommendations fit his financial interest or the best interest of the planner. Some also have little knowledge as to whether the products could be obtained elsewhere at lower cost. The majority of planners actually works for a brokerage firm or a broker and don’t really work for the client. The brokerage firm actually controls what products can be recommended.
Second, the traditional planning process does little to educate investors and help them deal with the instincts and emotions that are the root of poor investment returns they experience. How can you tell if your advisor is helping you avoid these problems? Simply take the “Investor Quiz” on this website. Answering these questions, I believe, is the key to having true peace of mind in an uncertain world. If you would like a second opinion about your investment choices, call us for a complimentary initial consultation.
