How is coaching different from a traditional financial advisor or financial planner? We have often said that the traditional financial advice model is broken. Interestingly, the old traditional model has become the source of many problems for people seeking investment advice. Although people naturally seek out a financial advisor or financial planner to assist with their financial affairs, we find that the heart of the problem lies in the way the advice is delivered.
For starters, financial planning or the development of a financial plan is very often used by traditional financial advisors as a sales or marketing tool to sell their firm’s financial products. And of course, the sale of these financial products produces a commission when the financial plan is implemented. Unfortunately, the investor rarely knows whether or not the plan’s recommendations and its implementation are in their best interests, or conversely, is in the best interest of the financial advisor or planner and their firm. In addition, the majority of financial advisors or planners work for a brokerage firm or insurance company, and do not really work directly for the client. In this case, the brokerage firm or insurance company actually controls what products the financial advisor or planner can recommend to clients.
Next, the traditional advice delivery model does very little to educate investors, much less help them deal with the instincts and emotions that are at the root of a poor investment experience. Almost no effort is given to help clients learn how markets work and achieve true peace of mind when investing.
So, how do you know if you are working with an Investor Coach or a traditional financial advisor or planner? Take the “Investor Quiz” on this website. Answer the questions that are listed. An Investor Coach will work diligently to help you answer all of the questions. If your current financial advisor or planner is not helping you seek the answers to these important questions, then it might be time for second opinion on your investments.