Sharing Is Golden When You Want Good Financial Advice

Want good financial advice? You’ll need to share financial information with your advisor.

It must sound pretty obvious. The more your financial advisor knows about your financial situation, income, spending, and goals, the better they can tailor their advice to your individual needs.

It’s like the difference between an off-the-rack item of clothing and one made to fit your exact measurements.

For example, a client just asked us if she should pay down or refinance her mortgage. Sure, we could toss out an off-the-cuff answer, but generic advice is rarely on target.

To answer the question the right way, we need to look at her most recent tax return, checking her tax bracket and whether she itemizes deductions. We also need to review her mortgage balance and interest rate, the value of her home, and do a quick update of what funds she has readily available outside of her retirement accounts.

All this – after plugging in our familiarity with her investment strategy and long-term returns – will tell us whether she could or should refinance, or use funds on hand to pay down mortgage debt.

Fortunately, the client who called with the question is super-organized and always on top of her financial details. Whenever we need an update, she gets it over to us within a day or two. As a result, one day after she first posed the question to us, we were able to discuss the pros and cons of a mortgage payoff with her over the phone. One more item for her to check off the “to do” list.

It’s much more frustrating to be asked this question when the client can’t tell us the mortgage balance, term or rate, or doesn’t want to be bothered sharing an updated tax return so we can check the tax bracket and deductions.

Advisors work very hard to not burden their clients with constant or unnecessary requests for data, but sometimes we do have to ask you for updates. To prepare accurate retirement projections, for example, we need to know how much and where you’re currently spending. Your health information impacts your retirement and insurance needs. A current tax return affects your investment, legal and retirement strategy.

Without good information, we can’t give you the best advice.

So just remember, when it comes to financial planning, sharing truly is golden.


About Mari Adam

Mari Adam, Certified Financial Planner™ has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!


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