The truth and three myths about working with a financial advisor

Part of what defines us as Americans is our independent spirit. When a job needs doing, we do it ourselves, owning it as our responsibility to get it done. In many ways this is a positive thing. But there are a few areas where our independence can block us from achieving on a higher level. One of these areas is our finances. As a collective, Americans have some room for improvement

Though estimates range, one 2021 survey notes that more than half of Americans have less than three months of emergency savings. There are many possible reasons for this (“keeping up with the Joneses,” inflation or salary stagnation), but I’d argue that these reasons are symptoms of the root problem — not using a financial coach. Because many Americans are DIY’ing their finances, there’s little accountability and no one to help when certain behaviors aren’t serving their end goals. Because of this, there’s often a disconnect between what people know they should be doing — saving more, spending less and reducing debt — and what they actually do.

It’s coaching that can help military families develop sound financial behaviors and discipline. Working alongside trusted professionals who specialize in coaching military families to pursue their financial goals, service members can focus on the important role they play to protect our freedoms and rest easy knowing they have a trusted partner in their pursuit of lifelong financial security.

The real benefits of working with a financial advisor even when we realize that we can benefit from the help of a professional, there are little voices inside our head that hold us back from connecting with a financial coach. Little voices that say you don’t have enough wealth or assets. Little voices that tell you the debt you’ve accumulated is embarrassing, so to avoid embarrassment, you avoid an advisory relationship. Advisors have seen many difficult financial situations but their job isn’t to judge — it’s to help get you on your right track.

A couple of the main reasons why families work with an advisor are to build savings and investments and to identify appropriate insurance options. But the value of a financial coach extends well beyond financial products and services. Advisors can help clients get their finances in order, build budgets and savings plans, and commit to and follow through on financial goals. They help clients avoid making rash decisions driven by fear or other emotions and prepare for life’s uncertainties. A true coach is a partner, someone committed to working with you year after year in pursuit of your lifetime goals.

These are the intangible but critical services we can’t easily provide to ourselves. We all need a coach. And coaching works. Those who work with an advisor are often in better spots financially than those who don’t.

Here are some results from comparing the finances of families working with an advisor to those who aren’t:

• Families who work with a financial advisor report a higher monthly savings rate. ($2,278 versus $1,165 for those without an advisor)
• Families feel extremely or very confident that their financial situation will improve in the next year. (80% versus 45% for those without an advisor)
• Families have on average about $27,095 more accumulated assets and retirement funds than those without an advisor.
• Families who work with a financial advisor feel more confident in their ability to retire comfortably. (81% versus 45% for those without an advisor)

These are the top three myths about working with a financial coach so that you can feel better equipped to pursue your goals.

Myth #1: I don’t have enough money to work with an advisor

One of the main barriers that prevents people from finding a financial advisor is that they don’t feel like they have enough money. There is no minimum annual income to start working with a coach, and building a savings is a huge benefit of working with a financial advisor.

Think about it. You don’t wait to find a personal trainer until you’re in great physical shape. It’s the job of the trainer to help get you to where you want to be. It’s the same for financial coaching. The sooner you start working with an advisor, no matter your financial situation, the sooner you can make progress on your goals.

Myth #2: All advisors are the same

Some of the trepidation about working with an advisor comes from the fact that there are many types of advisors. The strongest advisors are those who place a particular emphasis on coaching clients to practice productive financial behaviors.

The best advisors start by sitting down with you to discuss your financial goals. They then work with you to gather information needed to create a financial plan. Then, they create a plan that is personalized, comprehensive, integrated and ongoing. The last part is huge. The plans that advisors create can’t be “set it and forget it.” They check in regularly with clients to make sure they’re supported and making progress.

Additionally, there are many factors that differentiate the financial outlook of a military family. With this in mind, it’s important to work with financial advisors who aren’t just familiar with the military population, but who are the military population.

Myth #3: Working with an advisor is expensive

A good advisor will help clients to practice productive financial behaviors that will increase their savings, protect their assets and get them where they want to be financially. An advisor will look at the big picture and often recommends approaches that clients don’t see for themselves.

Don’t let any of these myths prevent you from achieving your financial goals. With a knowledgeable financial advisor by your side — specifically one well-versed in personal finance and military pay and benefits —  you can focus on the big responsibilities that you undertake as a service member or spouse. Let them help get you on a plan that feels realistic to you, keeps you accountable and guides you to succeed in pursuing long-term financial security.

Mark Steffe is president and CEO of First Command Financial Services, Inc.

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