October 22, 2007

The Financial TRAIL To Taming Your Financial Risks

Alone we can do so little; together we can do so much. --- Helen Keller
Accountants are the most trusted financial advisors. Unfortunately, they are rarely experts in how the tax advantages of life insurance can help their clients. That's fine because they were at least asking. That got me thinking, about the roles of different advisors in today's specialized world.

As time passes we all get better at blazing a trail through the thicket of advice. ---
Margot Bennett
Why The Weird Capitalization?
Your Financial TRAIL starts with Trust and relies on specialists in four areas:

  1. Risk: measures and reduces financial risks (e.g., insurance advisor)
  2. Accounting: tax planning, tax filing (e.g., accountant)
  3. Investments: selects and manages investments (e.g., stock broker, mutual fund advisor)
  4. Law: prepares and reviews documents (e.g., lawyer)

The Trusted Financial Advisor
One of these four --- typically your accountant --- is the trusted financial advisor, the one you consult before making an important decision. This happens most often in small businesses.

Many sports are based on teams. However, your specialists probably work separately, depriving you of the advantages of a true team.

The way a team plays as a whole determines its success. You may have the greatest bunch of individual stars in the world, but if they don't play together, the club won't be worth a dime. --- Babe Ruth

No comments: