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Studies consistently show that finances are one of the top stressors for most of us. I get it – money is an integral part of this world. It impacts so many aspects of our lives. But, finances can be confusing, and who has time, energy, or interest to research all-things-financial after a busy day? This is a big reason people turn to financial advisors for help. In fact, the desire to help is a big reason many of us became advisors.
“Comprehensive advice is defined as personalized guidance from an advisor that addresses all financial and wealth management needs; demonstrates an intimate understanding of the client’s lifestyle and goals; puts the client’s best interest first; includes a financial plan; ensures clients understand the fees they pay; and is an integral part of the client’s life. Today, just 11% of advisors are delivering this level of advice.”
-JD Power (2023) US Full-Service Investor Satisfaction Survey
According to this year’s JD Power survey (2023), many investors are not getting the type of help they need, and their advisor satisfaction reflects this. Historically, advisor satisfaction has followed the stock market performance – explaining the 17 points drop in 2022. 💩🚽
Think about that – the satisfaction of an advisor is highly correlated to the stock market, something the advisor has no control over. 😲😵
To me, this makes total sense – it’s an outcome of how the financial services industry works. As they say, follow the money. Advisors have to get paid to continue to help people. Two of the more common ways an advisor make money are:
A commission for selling you (or helping your purchase) an investment or insurance product.
(42% of those surveyed described receiving transactional advice.)
An asset-based fee for managing your investments in a way to meet your financial goals. This approach can come with a high investment minimum.
(47% of those surveyed described receiving goals-based advice.)
When an advisor gets paid by selling or advising only on investments, I get why they might focus on the investment returns, causing satisfaction to closely track market performance. And, maybe this is why financial stress remains high for many – too many people are only getting help on investments, not their finances. They are missing comprehensive advice and planning.
The results from the survey were not a surprise. Better Pockets Financial was started because of the gap in access to comprehensive advice. We want to help with your complete financial life and believe the best way to do that is to be a Fee-Only Fiduciary. As Fiduciaries, we are legally required to put your best interest first. Fee-Only means we only get paid by what you pay us. Our ability to help is not dependent on your need to buy a product. Don’t worry, we can’t sell you anything anyway.
Our Ongoing Financial Planning Packages offer comprehensive advice for the stage of your financial life where you are at. Cornerstone Planning is for building a financial foundation. Wealth Planning is for growing wealth. Capstone Planning is for spending wealth in retirement.
Planning includes understanding your values and what impact you wish to create; aligning your cash flow to support your impact; preparing for risks that might derail your plans; and investing for your future. We build a plan around you and your needs. And importantly, we monitor and update the strategies to respond to changes in your life to navigate tomorrow’s unknowns – you know...like global pandemics and economic recessions.
Our planning packages have no investment minimums, meaning advice is not just for those who have assets. Instead, each package offers monthly subscription pricing. This also means if you want to manage your own assets or use another investment advisor, no problem.
For those that prefer us to manage assets, we can do that too. Essentially, the monthly subscription acts as a minimum fee. Each planning package has an investment threshold; if assets are below the threshold, you pay the monthly subscription. If your assets are above the threshold, only an asset-based fee applies.
(Note: additional investment platform and strategist expenses apply).
Better Pockets Financial was founded with the goal of helping our clients have a positive impact in their pocket of the world. A simple ripple effect of goodness.
As lives become more complex, financial stress can divert energy and resources, preventing you from realizing the impact you wish to have on your community and loved ones. When that happens, we are here to help with comprehensive advice and planning. When you want to learn more, it simply starts with a conversation. Reach out to us and get started.
We look forward to helping you make your pocket of the world a better place.
Josh Newell
Financial Planner & Co-Founder
Reference: https://www.jdpower.com/business/press-releases/2023-us-full-service-investor-satisfaction-study