September 14, 2008

Your Trusted Financial Advisor: What You Like/Dislike

Coming together is a beginning.
Keeping together is progress.
Working together is success.
— Henry Ford


As you move along your Financial TRAIL, you rely on advice from experts in risk, accounting, investments and law. The wealthy have 1-3 advisors and have known them for 5-10 years. One advisor is usually the most trusted. Typically, the accountant.

What do you the wealthy want from their most trusted financial advisor? This is what the research organization LIMRA found.

What You Want Advice About
The wealthy ask for help in these areas
  1. Tax advice and income tax strategy (67%)
  2. Retirement planning (63%)
  3. Selecting securities (58%)
  4. Financial planning (55%)
  5. Asset management and allocation (49%)
  6. Life insurance (48%)
  7. Estate planning, leaving an inheritance (47%)
  8. Funding children's education (34%)
  9. Managing distribution of retirement funds (32%)
  10. Use of loans, mortgage and credit (26%)
What You Like
Here's what the wealthy like about their trusted financial advisor
  • Warm, personable, friendly
  • The right level of detail
  • Constructively challenges your ideas
  • The right balance between broad general knowledge and deep knowledge in a specific financial area
    This is good news. There are gender differences. Women prefer working with a generalist and men prefer specialists. While many things are done well, the wealth identified weaknesses too.

    Areas For Improvement
    The good things take care of themselves. We want to find all the negatives. — Wayne Huizenga
    The wealthy want their trusted financial advisor to improve in the following areas
    • Advise you proactively
    • Interact with you more frequently
    • Make aggressive recommendations
    • Service you with a team of specialists
      The demand for aggressive recommendations puzzles me since you primarily ask for tax advice and income tax strategy. Can this be right? When I ask, accountants say yes. Even in Alberta, the province with the lowest taxes, you are willing to take more risk to get more after-tax income.

      We've looked at a technique earlier: "10-8" Insured Leveraging, which combines the tax advantages of life insurance, and borrowing to investment. Your accountant applies the resulting tax deductions for your benefit — which makes you like them even more. 

      Links and Sources

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