The Five Roles of an Advisor

There are many roles that a fiduciary financial advisor can play, but being a market forecaster is not one of them. Even among my professional colleagues, however, I see a steady flow of articles attempting to guess what will happen next in the investment markets. Truth is, no one knows and this is not a contributing factor to long-term financial success.

Some clients also fall into the “performance trap” and think the primary role for an advisor is to “beat the market” every year. In reality, the value of un-conflicted financial advice is not dependent on the markets at all. The value emanates from a good understanding of how money impacts your goals, how your resources match these goals and then helping you craft good choices.

The five main roles that an advisor can play that have nothing to do with markets:

  1. The Expert: One of my early mentors cautioned against trying to be a “Renaissance Advisor”. He was right. It is impossible to know everything about such a broad field. However, you should expect sound technical expertise particularly in assessing your present situation and your long-term goals.
  2. The Fiduciary: Our firm has always operated as a fiduciary, even while most other “advisors” have not. The financial world is awash with product purveyors and solutions to every possible financial malady.
  3. The Teacher: We often tell clients that our central role is education, or sometimes “re-education”. We try to teach clients the damaging impact of reacting to current events and instead stress the fundamental components needed to secure financial confidence.
  4. The Coach: This role involves helping clients stay focused and disciplined. Sometimes this means offering reassurance and at other times means providing dispassionate reasoning so that appropriate decisions can be made.
  5. The Protector: There are many obstacles along the path towards a sustainable financial future. Our role is to be a guardian, a protector as circumstances and objectives inevitably change.  In our firm, we have no customers…we have clients where our duty is to protect.

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