Once a Financial Advisor Designs My Strategy, Am I Done?

When a financial advisor designs a short and long term financial strategy on behalf of a client, the first thing the client has to do is to implement the immediate changes called for in that strategy. For any short and long term goals to be achieved in these situations, investors have to work hand in hand with financial advisors, and a good deal of mutual trust must be involved for the whole thing to work. It is one thing to pay an advisor to come up with ideas on how you might get where you want to go in your financial life; but it is another thing entirely to trust that person enough to make the short term changes representing the first steps towards getting to that eventual plateau.

Meet Periodically to Discuss Goals

In an ideal working relationship between a personal finance professional and an investor, the investor will trust the professional implicitly to make sound choices and to employ expert decision making skills to come up with a sound financial strategy to ensure long term prosperity for the investor. When this kind of trust is present, it creates a scenario when both parties can work together as a team to achieve a common purpose. To this end, you should periodically meet to discuss your goals. More specifically, your investment advisor can go over details of your strategy and how it is playing out.

Taking a close look at your portfolio every now and again is a good start. You can get a feel for how your investments are performing against your projections going in, and discuss whether any major or minor changes are in order to get things moving if your accounts are struggling. Depending on how old you are and how long to plan to hold on to your investments, you might just be in a holding pattern early on, waiting to see if the funds you've selected perform over time. The markets can be volatile on the short term, but many funds do quite well historically if we show a little patience and let them play out the rough patches in the marketplace.

Talk About Recent Life Changes

Another important reason to stay into contact with your financial advisor is to keep her apprised of any major life changes that have occurred in the intervening time since you last got together. For example, you may have experienced job loss or had your wages or benefits cut; or alternately, you may have come into a promotion or new job opportunity affording you higher earning power and more investment flexibility. New children who have arrived or are on the way could also impact your short and long term financial strategy.

Financial Strategy a Flexible Path

It is important to remember that a strategy is not a specific road map, but more like a general directional goal. There is nothing that says you can't make changes whenever necessary. You need to have some flexibility to respond when unexpected events occur or when changes in your life dictate changes in your investment activities. Don't be married to the specifics of a strategy even if it works; there may always be something just around the corner that will work even better.

Once your financial strategy is in place, it is up to you and your financial advisor to work together to monitor its progress to determine if changes or adjustments need to be made. On your end, major short term financial changes must be shared to make room for necessary adjustments.

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