Guest column: Don’t keep secrets from your financial adviser – Asheville Citizen-Times

Katherine Morosoni, Special to the Citizen-Times 10:13 a.m. ET May 4, 2017

Katherine Morosoni(Photo: Courtesy of Katherine Morosoni)

How do I know if I am on the right path? is my favorite question I hear as a financial adviser.

I had a couple in their 30s in my office, and they asked this question. I love this question because it gives me permission to become their partner in their financial success. We talked about their liabilities and assets so credit card debt and credit score, their house value, their mortgage value, their emergency fund amount, their income and expenses, the what ifs and their future plans.

Emotions make it hard to know if you are doing the right things.

The couple shared that they felt they were barely surviving and keeping their head above water. They did not feel that they are where they should be. Listening to them, I saw a different situation. I saw a couple aligned and on the right path to creating their financial success. They are aligned because they agreed to meet with me.

Treat your adviser like a professional partner.

Would you tell your doctor only some of your symptoms for the correct medical diagnosis? As a client partner, I need to know more than just the numbers of their financials. I need to know about their family, their work, their play, their plans and then their money. By looking at all aspects of their life, I can make sure we are planning correctly for all of life facets.

If clients tell me what they think I want to hear, we cannot plan around the unknowns. For example, if a client experiences a job change, we as a team can better position the job changer to know how long will their cash reserves last? Are there other options we utilize to help weather that life change? If I do not know about a clients full situation, then my recommendations will have serious gaps or could be the wrong solutions.

Work from the facts of the situation.

One of the hardest things is to be honest with yourself about where you really are. This couple have not been perfect but they have chosen well on many financial decisions and actions. They have an emergency fund that easily covers emergency expenses.

Compared to their peers, their credit score was high and enviable. Their liabilities were manageable, credit card debt was under control and while there is a mortgage, they have already paid enough to build equity in their home. They started planning their retirement through their rollover IRAs from a previous job.

Life happens, are you ready for the unexpected?

The couple wisely have protected each other in case of the unexpected. All family members have health care. If someone dies unexpectedly, the survivor is covered with a life insurance policy that will pay off the mortgage and give the survivor a years income to get back on their feet.

I assigned them homework for the areas of concern that include getting a will and designating who will become their childrens legal guardian if something happened to them both. Another area of concern was that they compared themselves to others they know and where this couple thinks those other people are in their financial journey. My advice is people need to run their own race and not compare themselves to what they think is going on with others. As my dad reminds me, you never know what goes on behind closed doors.

What I love about people who ask the question, How do I know if I am on the right path? is that they are opening themselves up, welcoming an outsider, professional opinion on the decisions they have made. They are also willing to accept suggestions on what they can adjust. Part of my job is to partner with people, develop a financial wellness strategy, advise them on paths to reach their goals. In the hard times, when it feels nothing is going right, I show them their big picture of their financial goals and how it may not feel like it, but they are progressing toward their financial independence. It all starts with being vulnerable and asking How do I know if I am on the right path?

Katherine Morosani is an Asheville-based financial adviser offering securities through 1st Global Capital Corp., Member FINRA, SIPC. Investment advisory services offered through 1st Global Advisors, Inc. Insurance services offered through 1st Global Insurance Services, Inc.

Read or Share this story: http://avlne.ws/2pL2BCH

Continue reading here:

Guest column: Don't keep secrets from your financial adviser - Asheville Citizen-Times