Too Many People are Lying to Their Financial Advisors

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As we continue navigating out of the global pandemic, many are concerned for their futures and feel vulnerable to the world’s whims. There are few places where this is manifest more directly than in retirement planning. 

A recent Allianz Life survey highlighted an overwhelming majority of respondents were concerned with unexpected large expenses, the impact of a market downturn, as well as the rising cost of living and healthcare expenses. 

These concerns are not surprising to hear while the economy recovers. However, the surprise was that while close to half of respondents were engaging a financial advisor, only a third discussed their concerns with them. 

Quote: “We have a problem with advisors listening to their clients and getting them to share what their number one fear is.” — Kelly LaVigne, vice president of Consumer Insights at Allianz Life

Let’s call it a lie of omission, not an outright falsehood. But it can have broad implications to the success of your financial plan over the long term.

What are Consumers Supposed to Do?

While financial advisors have the professional training and skill set to maneuver clients through troubled waters, their advice is only as good as the data they have from their clients. 

Therefore, clients need to practice speaking up and asserting their priorities for retirement and other long-term plans to make the most out of the financial services they have engaged. Just talk about it.

At the same time, financial advisors need to do a better job of listening and probing clients for their fears and concerns for the future.

How?

  • Open up fast: Doctor-client privilege exists in medicine for a reason. We often have to discuss uncomfortable topics with our doctors and no one wants their MD gossiping about their health around the country club later on. It’s the same with your advisor. They’re here to help you, not judge. But they need to know everything that’s going on and what you want in order to be of service.
  • Don’t kid yourself: We all do it. We lie to ourselves sometimes to make ourselves feel better. You didn’t really have that extra cocktail. You really needed that new pair of shoes. Whatever it is, it’s all too common. But your advisor needs to know the real details so that they can create an effective financial plan for you. They don’t care that you made less last year or that your company is about to go bankrupt. They need that information to set you up for personal success. 
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