Money Worries That Keep Your Financial Advisor Up at Night
And believe it or not, even top-rated financial advisors find themselves occasionally chewing the covers. So we decided to ask some financial advisors what worries them the most—and find out how they put those fears in their place.
The Fear: What If My Kids Aren’t Set up for Financial Success?
“I have four children ranging from 13 to 25, and I want to make sure they’re off to a good start,” says Kimberlee Orth, Private Wealth Advisor with Ameriprise in Wilmington, Delaware. Valerie Newell, Chairman and Managing Director of RiverPoint Capital Management in Cincinnati, Ohio, echoes those fears — worrying that offspring will (like many millennials) be too risk-averse because they saw the 2008-2009 volatility firsthand. "What I have been preaching to my two boys [is]: Stop saving and start investing,” says Newell. “You have got to feel comfortable about investing, and that means educate yourself.”
Squash it: “[In] the household I grew up in, we didn’t talk about money — ever,” says Orth. That’s why she and her husband (also a financial advisor) convene a financial meeting around the dinner table every Sunday night. They talk about the previous week, the one coming up and any upcoming big expenses. For example, Orth’s daughter is looking at buying a car, so the entire family team had a conversation about savings, affordability, and financing. “The child who’s buying the car is getting the immediate information, and the other three are hearing it and listening,” she says. Another idea? Jane Williams, chairman of Sand Hill Global Advisors in Palo Alto, California, involved her two sons with allocating extra funds to charities they thought were important. It helped teach her kids the value of a dollar and how far a donation can go towards helping people.
The Fear: What If I Outlive My Money in Retirement?
“The threshold to retirement is an anxious one for everybody,” says Williams. “Will we outlive our resources?” Any time she’s considered dipping into savings to pay for a shorter-term expense (like a remodel or vacation), she asks herself if she’s doing that at her peril or in a balanced way. She says it’s a constant battle, even for a pro like her. For Mark Curtis, Wealth Advisor at Greystone Consulting, also in Palo Alto, the fear is not so much about accumulating enough — but converting the money into an income stream that will last as long as he (and his clients) do. “What keeps me awake at night is investing for income and income replacement later in life,” he says. “The one thing I think a lot of us think about, including advisors, is: What does my income look like if I want to start not working as much? What are the challenges I’m going to have converting my investment outlook personally from accumulation and growth to income.”
Squash it: “I literally have taken up meditation because I think you have to be grateful about what you have and realistic about what you really need,” says Williams. “But that doesn’t mean there aren’t….3 in the morning wake-ups where I’m just gnashing my teeth and worried,” she says, noting that these are largely irrational due to sufficient resources and assets. The fix: Do something about it, whether it’s meditation, regular check-ins on your savings, meetings with a financial advisor or all of the above. Know that worry isn’t always a detriment — although “you need to manage it and control it and be rational about it,” says Williams. “I just try to remind myself on a regular basis that the concerns that I have are largely within my control to manage — and that if I’m attentive and I watch my own thoughts go by, I can get on top of them,” she says. As for Curtis, he says that changing the way he thinks about retirement investments has been key. He advocates separating the principal from the appreciation — noting that even if your investments didn’t increase in value, you’d still have an income stream. That can make you feel safer.
The Fear: What If I Can’t Ignore the “Noise”?
We’re living smack-dab in the middle of the Information Age — meaning streams of media, content, and data are constantly at our fingertips. Curtis got into the habit of staying up past midnight in Pacific Standard Time so he could check on the Asian and European markets before he went to bed. “I worry: [Do] I disconnect from that enough to allow me to see the big picture?” he says, noting that it’s important for all of us as investors to keep a long-term focus, because the further removed you are, the clearer the trends — and the idea that short-term dips don’t affect long-term outcome — become.
Squash it: Step back from your phone, computer or television for designated periods of time. Focusing on financial fears can cause them to multiply, says Curtis, especially into questions like, Am I making enough? Am I keeping up? Am I smart? “Forget all that,” he says. “Every now and then when I do get rocked, it’s probably when I’ve let some external issue creep in.” So, ask yourself: What am I an expert on? The answer includes: “yourself, your situation, your goals, and objectives,” he says. “Keep those in the forethought.”