How and When is Wealth Management Worth It?

Dana Brewer, CFP®
Jun 23, 2022 1:15:00 PM

Wealth ManagementIt is hard to comprehend all the meanings and emotions tied to the two simple words “worth it.”  Worth comes in many different flavors–it may be connected to emotional needs and often associated with money. To measure worth, we often compare choices such as, “Is it worth it to pay for a financial advisor to help with my financial goals?” or “Should I continue to do it myself? Breaking down those two questions may help address if wealth management is really “worth it.”

Each person must place a value on what is most important and helpful to them, and it can be hard to do if you have never worked with a financial advisor. Even those who have worked with advisors may have had very different experiences, both based on different advisors or the complexity of your financial needs. 

Quantifying the value of financial planning can be very personal. For example, how would you value:

  • Going from fearing your finances to having a personal sense of well-being and financial fulfillment.
  • Helping people move from work they dislike to work that is fulfilling and empowering.

Sometimes the value is straightforward and easy to measure, such as when we help discover a tax planning strategy that saves thousands of tax dollars. Sometimes, changing our client's relationships with money can be enormously valuable. 

How do you measure if wealth management is “worth it?” That is for everyone to decide for themselves, but here are several ways working with a financial advisor may add value and therefore be “worth it.”  We help clients:

  •  Keep track of and make more efficient their financial affairs. 
    Clients know that disorganization costs them money but don’t always know what to do. We can help put everything in one place, show them how it all works, and take away the anxiety that comes from disorganization. Get started by downloading our Getting Organized Guide.
  • Create spending plans, so there is a plan for every dollar.
    Are your dollars being spent on choices that are important to you? We help clients identify what is essential in their lives and prioritize their goals. Learn more: Bucket Budgeting Creating a Cash Flow Management System that Works for You.
  • Create an organized, diversified portfolio.
    And stand between them and the often-dysfunctional emotional decisions that many investors make with their investments. The magic of a smoother investment ride will produce more terminal wealth. But unfortunately, most people do not understand diversification across asset classes and often take action at just the wrong time.
  • Get into the habit of saving and investing.
    A person’s savings habits may significantly impact their terminal wealth. It often has more of an impact than their rate of return.
  •  Create routines to reach what may seem like impossible goals.  One of the truly magical lessons of life is that almost any enormous goal can be broken down into manageable increments and achieved by routine and persistence. Clients often think there is some magic secret that other successful people know that they don’t know, and here is the magic – wealth usually takes time, and it comes from the discipline of living under your means and investing the excess. 

Does it matter if you have a large and complex financial picture or are just starting? Probably not; the same principles apply. Being proactive about your financial plan, working with a professional, and taking the emotion out of your financial decision-making works for all levels of net worth. 

Wealth accumulation and retirement planning can seem huge and unattainable. Indeed, we can add value with our traditional tax, estate, and risk planning tools, and learning to use the right tool at the right time for each client we work with can be game-changing. However, understanding all of this takes time. An advisor must build trust and understanding with each client, and for us to add the most value, we must do a good job of communicating our advice at the right time so that the clients will understand the value.  Is our advice “worth it”? I hope so.

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Investment Advisory services offered through Birchwood Financial Partners, Inc. an SEC Registered Investment Advisor.

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