As they go through their daily lives, most people prefer to feel like they’re in the driver’s seat making the decisions and choosing their own path. Psychologists refer to this notion as a sense of agency. It’s the feeling that you’re in control of your life, rather than simply drifting through it. Your sense of agency comes into play in all aspects of life, from your medical decisions to your fashion choices. It’s also an important factor to discuss in terms of personal finance.
Most people want to feel in control of their finances. Now, there are certainly some who feel they’re not in control, but they generally see this as a deficiency — something they need to improve. We agree it’s wise for everyone to be in charge of their money, aware of how they’re spending it, and captain of the ship that is their financial future. But we have also noticed that sometimes, fear of losing financial control can hold people back.
Here’s what we mean by that; sometimes, a desire to be fully in control of their money keeps people from seeking the guidance they deserve. Usually, these well-meaning, responsible individuals are under the false assumption that working with a Financial Advisor means handing over the reins and letting someone else take responsibility for their financial future. In other words, they associate hiring a Wealth Manager with a loss of agency. It doesn’t have to be this way.
Working with a Financial Advisor should not feel like you’re handing over control of your money. You’re not giving up your role as captain of your financial ship. Rather, you’re hiring a first mate to help you be a better captain! As Financial Advisors, one of our top priorities is to maintain our clients’ sense of agency and help them feel more confident in the financial decisions that they are making.
So how do we make sure you still feel in control of your money when working with a Financial Advisor? There are a few steps we take throughout this journey, and there are a few steps we recommend you take, too.
How Financial Advisors Keep You In Control
Those who have never worked with a Financial Advisor sometimes think our job is to make all of the financial decisions for our clients. In reality, our overarching goal is to help clients create and execute financial plans that allow them to achieve their life goals. Perhaps your goal is to retire in the Caribbean in 20 years. We assess your current finances, help you narrow down your goals, and work alongside to you create a budget and investing strategy that will allow you to meet your goals.
If you can start to look at financial advising as a partnership rather than a top-down, authoritative relationship, it’s easier to see how you can remain in control of your money when working with an advisor.
Here are a few more specific actions we take, when working with clients, to ensure they retain their sense of financial agency.
We Ask Questions
Especially when we’re first getting to know a new client, we ask a lot of questions. We really aim to get to know you as a person. What drives you? What do you want out of life? Asking these questions — and listening closely to the answers — allows us to offer advice and guidance that feels in line with your needs and preferences. You’re still steering your financial ship, and we’re discovering the best ways to help you do so.
We Educate You
We never just take your money and invest it in a fund you’ve never heard of and don’t understand. Rather, as we work with clients, we aim to educate them. We teach them about the various investments we’re recommending, and we point them towards good resources they can turn to for additional information.
There’s a lot of financial information out there, and unfortunately, it’s not all good information. We aim to give you educated, informed, expert-level financial information you can depend on. Knowing you’re making your financial decisions based on the correct information and expert opinions can help you feel more in control.
We Make Updates
Life changes. Some would even argue that life is all about changes! Whether you switch professions, have another child, move to a new city, or take up a new hobby, it’s important that your financial plan is adjusted accordingly. When you work with a financial advisor, you continue to be the one who makes and adjusts to these big life changes. When they occur, you tell your financial advisor, and they help you restructure your financial plan in response.
Your advisor will never force you to stick to a financial plan that is no longer in line with your needs. Instead, they’ll help you retain control of your finances, even when the world around you is shifting and changing.
How You Can Maintain a Sense of Control
Now that we’ve discussed a few ways in which Financial Advisors ensure their clients remain in the driver’s seat, we’re ready to present a few ways that you, as the client, can maintain your sense of financial agency when working with a wealth management team. Not every client takes all of these steps, but they are steps that you’re welcome to take at any time.
Ask Questions
As much as we love asking questions of our clients, we encourage you to ask questions, too. Are you wondering why your advisor recommends a certain investment? Ask; we’ll be happy to explain. Are you unsure of how the plan we’ve developed will allow you to retire on time? Request some clarification; we’d love to know how we can communicate more clearly.
We never want our clients to feel confused, bewildered, or like we’re trying to steer their ship into uncharted waters. We want you to fully understand where your money is going and why — because we believe that helps you retain an ever-important sense of agency over your finances.
Bring Us Your Money Ideas
Especially if you’re a motivated, driven individual, you may spend time researching various investments and talking to friends about financial ideas. If you come across an investment opportunity or a financial strategy you like, we want you to feel free to bring it to us.
No, this is not because you need our approval to spend your money. It’s your money, after all. We’re just here to offer an informed, expert perspective on the ideas you come across. We can sit with you and help you figure out whether the investment or strategy fits into your overarching financial plan and goals. Sometimes, we’ll find that it does, and other times, we’ll conclude that it doesn’t. But we’ll reach those conclusions together.
Stay Engaged
The best way to retain a sense of control over your finances, whether or not you’re working with a Financial Advisor, is simply to stay engaged. Check your banking app regularly. Keep an eye on your investments, and watch how the market is trending. Read financial magazines and websites to stay up-to-date on the latest trends. When you’re working with a financial advisor, you can simply add “meet with your Financial Advisor” to that list.
By meeting with your advisor regularly, you can always keep them up-to-date with the latest changes and challenges in your life. This makes it easier to make small, incremental changes in your financial plan over time. You can ask questions as they come up, slowly gaining financial knowledge over time. The more you engage with your finances and Financial Planner, the stronger your sense of agency will remain.
Working with a Financial Advisor does not equate to giving up control over your finances. Your sense of agency is paramount to your success and happiness, and we do our best to help you retain that agency. If you’re interested in wealth management or financial advising, contact RLJ Wealth Management. We take a client-centered approach, helping you visualize and achieve your dreams through wise financial planning.