There are many things in life that we can figure out on our own, given a little time and patience. On the other hand, there are other things that we struggle to do on our own (even if we don’t admit it). Financial planning clearly fits into this latter category.

Dr. Dan Ariely, a behavioral economics professor at Duke, points out that we don’t have an evolutionary part of our brain set up for financial decision making. He believes that may explain why we make so many mistakes. Professor Ariely describes how it is easy to fall into a predictable, repeatable pattern of errors in this brief clip.

We often see prospective clients that come here with one foot still in the “Do-it-Yourself” camp. They sometimes want a one-time review or a second opinion about their overall financial decision-making process. We don’t do that for one simple reason…it has limited value. We only take on clients where we believe we can deliver substantial value . Numerous studies point out that the predominant and most valuable factor in financial  advice is behavioral coaching. The most effective way to provide behavioral coaching is through a long term advisory relationship.

 Ongoing financial planning advice is not primarily concerned with portfolio performance. Instead, real financial advice is focused on increasing the likelihood that you will meet your financial goals. How much your are saving (or spending); your overall investment allocation; your time horizon; and most important, your behavior are the inputs that will likely determine if you achieve your goals.

 Since we are prone to “predictable and repeatable” mistakes, real financial planning advice is not a one time need, but rather a lifelong need. Good advice is invaluable only if it is acted upon. Our experience teaches us that creating action often requires ongoing encouragement to break the stronghold of inertia.

 Occasional, ad hoc financial advice ends up being mostly about “validation.”  That is, this type advice usually justifies decisions that likely have already been made. By contrast, we provide advice that may well challenge, rather than validate, your current financial decision-making process. We all have blind spots, places where built-in biases can lead us down the wrong path. Financial mistakes tend to be very expensive. Avoiding mistakes starts with recognizing that you need help, not just today but well into the future. Ready for a real conversation?

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