You likely hired a financial advisor so that you could have a professional help you plan for your future. You know, how you’re going to put your kids through college, how you’re going to pay for that vacation home and, yes, even how you can best live comfortably in retirement. Some planners will even handle wills and trusts.
It’s your financial planner’s job to take direction from you and then act in your best interest to meet your goals. With all that being said, your planner won’t be able to adequately do their job if you keep important information from them. What’s more is many planners only work off of the information that you disclose to them. In other words, they won’t do a comprehensive look into your assets and current financial situation — they’ll just work off the information that you give them and the assets that you share with them.
Bottom line: In order for a financial planner to work in your best interest, it is your best interest to not hide anything from them. Yet, you’d be surprised at just how many people do. Here’s a closer look at some of the key things people don’t — but should — share with their financial planner:
Family Strife
It’s never ideal to have an estranged child or a family member with addiction issues. But these issues can play a huge role in certain financial decisions, especially if an estranged child, for instance, is still a part of the will. It’s certainly understandable that a parent wouldn’t want to completely cut a son or daughter out of their will, but a planner can help you set up a trust so that the estranged family member doesn’t just have free rein to any money.
Generally, anyone working with financial planners should make sure they disclose things like ex-spouses, legal agreements, child support payments and other things that may be uncomfortable to address. Failure to address it will just bite you that much more in the long run.
Undisclosed Assets
This one should be obvious, but you should never hide any assets from your financial planner. Any amount of money — no matter how big or how small — all counts toward a piece of your overall financial puzzle. And being that some assets may be subject to different taxes, it only benefits you to make sure your financial planner is in the know about everything. This includes the likes of life insurance policies, real estate, pensions, annuities, alimony and more. Even if you don’t think it’s a big deal, make sure you disclose it. Remember, your financial planner is an expert in helping you manage your money and plan for your future.
The same goes for any debts that you might have that may not be obvious, like credit card debt.
Health Issues
The older you get, the more your healthcare is likely to cost. Yes, it’s a real drag getting old — but it’s important to plan for. This is especially true when you consider that the average retired couple is expected to account for nearly $300,000 per year in healthcare costs. Do you suffer from a particular medical condition that needs to be accounted for in the future? Or does a particular disease run in your family that you’re at a heightened risk of being diagnosed with? Make sure you disclose this information, as your financial planner can help you budget for the expected costs associated with these conditions.
Remember, your financial planner is an expert in helping you manage your money and helping you meet your financial goals. But they’re only going to be good if the information you give them is accurate. So, come clean with your financial planner, even if some of the information has the potential to make you feel uncomfortable. In order to get the most return on investment out of a planner, you have to be honest and open with them.
Regards,
Ethan Warrick
Editor
Wealth Authority
