Navigating the world of finance can be a daunting task, but having a financial advisor can be a game-changer. In this article, we'll explore how women can work better with their financial advisors and the red flags to watch out for. We'll also delve into the various ways a financial advisor can support you, from tailoring insurance plans to assisting with wealth and business transfers. But first, let's address a bold statement: the relationship between you and your financial advisor is crucial, and it's essential to build trust and foster open communication. Now, let's dive in!
The Role of a Financial Advisor
A financial advisor is like your strategic partner in navigating life's financial decisions. They provide a clear and concise perspective, helping you understand how money works and how it can be used to future-proof your life. According to Lisa Eng, a senior consultant with Financial Alliance, an independent financial advisory company, the financial advisor's most vital role is to cut through all the fuss and provide a clear and concise perspective.
Valerie Kok, a partner with St James' Place, a wealth management company, agrees. She describes your financial advisor as 'your strategic partner in navigating life’s financial decisions.'
Benefits of Having a Financial Advisor
Everyone, from working women to stay-at-home mothers, can benefit from having a financial advisor. According to Kok, an advisor can help you define your financial security, structure your wealth around your goals, and recommend solutions and plans to see you through different life stages.
They can also act as behavioral coaches, helping clients stay calm during volatile markets and make decisions aligned with their long-term objectives rather than emotions. Beyond creating plans to help you meet financial goals like retirement, buying a home, or making investment decisions, there’s more your advisor can help you with.
1. Tailoring an Insurance Plan for You
We're not talking about the usual straightforward life or health insurance plans. A good adviser can help you source specific policies tailored to your individual needs and financial capacity, so you don’t end up overpaying for generic plans, said Eng.
2. Being Your Financial Marriage Counselor
As money is often one of the main causes of strife at home, your adviser can serve as a neutral, respected mediator between you and your spouse, to help you both clarify differing goals and find common ground on spending and saving priorities, said Eng.
3. Planning Your Sabbatical Finances
With burnout being real these days and taking a sabbatical becoming more common, your adviser can help you plan your finances to tide you over during your work break – especially if you’re taking unpaid leave for it. Through a holistic financial assessment of your current income, expenses, assets, and debts, your adviser can create a detailed budget and cash flow model to help you avoid financial stress, and plan for potential unexpected costs during your sabbatical or even career transition, Kok explained.
4. Assisting with Wealth and Business Transfers
A good adviser can help organize essential documents such as insurance plans, wills, and even trusts and beneficiaries to help create a clear, organized record, said Eng. Having such critical paperwork organized well allows you to act quickly in times of emergency.
How to Spot the Red Flags
Finding the right adviser is like finding the right doctor – the relationship should make you feel safe, understood, and supported, said Valerie Kok. This means if you’re not comfortable with your current adviser, it’s perfectly fine to find another. Here are the red flags to look out for:
- Having a poor attitude: Instead of listening to your needs, they criticize, condemn, or complain about your decisions.
- Being ill-prepared or prone to ghosting: If they show up at meetings without reviewing your file or continually postpone scheduled reviews, they are showing a distinct lack of sincere interest in your financial well-being.
- Pressuring you to make decisions: When your adviser pressures you to sign paperwork immediately, discourages you from seeking a second opinion, or pushes investments that generate high commissions for them but confuse you, it’s time to politely bid them farewell.
The Importance of Building a Good Relationship
When it comes to their financial journey, women embark on it very differently from men, said both Eng and Kok. Women often approach finances from a relational, values-driven angle – they want to understand why something matters before deciding what to invest in, said Kok.
Thus, it is important to build a strong relationship with your adviser to achieve your financial goals. And for women, it’s all in the details. Compared with men who tend to focus on the macro when it comes to financial planning, such as benchmark returns and overall portfolio performance, women tend to look at the micro, which is 'rooted in our essential need for security and emotional preparedness', said Eng.
How to Work Well with Your Financial Advisor
For peace of mind, meeting your advisor regularly is key. 'Regular reviews ensure that your plan stays relevant,' said Kok. You shouldn’t be meeting your adviser often just to show that you’re being proactive about your finances.
'Constantly badgering your adviser or demanding daily updates is simply an expression of worry and lack of faith,' said Eng. An annual review for proactive check-ins, plus a critical event meeting if you have any changes that might warrant an update to your financial plans, such as job changes, inheritance, or buying a new property, can strike a good balance, said Eng.
The key is to maintain an open line of communication that covers not only in-person meetings but also for ongoing dialogues where needed. At the same time, just as you would expect your adviser to come prepared to your annual review, you should also do some prep work to ensure the meeting is productive.
For first-time meetings, bring documents such as current insurance plans, investment portfolio, CPF statement, and mortgage documents, if any. But more importantly, to better manage your financial journey, instead of telling your adviser that you want to obtain more money, say, 'I want to retire at 60 and travel across Europe for three years' or 'I want to be able to send my children to university in the UK in 10 years'. By quantifying your financial goals, both short- and long-term ones, and incorporating a timeline, your adviser can better tailor goal-driven solutions to help you along the journey, said Eng.
She also advised women to focus on deviations and next steps at these regular check-ins. And don’t forget to review the actionable items from your previous meeting so you can write down any questions, organized according to importance, beforehand to get clarification and answers if you’re still unsure. This shows your adviser that you value their time and are ready for the next level of advice, added Eng.
