Intro: Welcome to the Paragon Financial Partners podcast, where we discuss the markets, our strategies, and how to live better today while planning for tomorrow.
Elean: Hello, and welcome to the Paragon podcast. I am Elean Mendoza and I’m here with Evan Shorten, the firm’s founder and principal.
Evan: Hello. I want to thank everyone for tuning into our podcast. You can stay up to date with the podcast by subscribing via the Apple Podcasts app or by subscribing to Stitcher Radio. Finally, I encourage you to visit our insights blog at paragonfinancialpartners.com/insights to read our written content.
Elean: So one of the things that I get asked a lot when I talk to people about this industry is why does someone need a financial advisor? When I look back on all the podcast episodes, I noticed we haven’t discussed this topic before. So I figured giving people some insight into the type of value we provide to our clients could be very informative. So Evan, what’s one major thing that comes to mind when someone asks why they might need a financial advisor?
Evan: Well, I understand that some people can be skeptical at first. Most people manage their finances on a day-to-day basis and can generally keep things in order; but implementing a long term financial plan to fund multiple goals like the accumulation and distribution phases of retirement, college planning, buying a home and a multitude of other competing goals is a very different ball game. While this doesn’t mean you can’t do it on your own, you shouldn’t underestimate the expertise required to put together a financial plan that can last multiple years or even decades.
Additionally, as an add-on, it can be difficult to stick to a long term financial plan by oneself. Sometimes we are our own worst enemy and hiring a financial advisor could help keep things on track.
Elean: That also brings up another point. People oftentimes are not objective when it comes to their own views of their personal finances. It’s hard to be honest with oneself about whether you’re saving enough, spending too much, if you’ve made the right investment choices, etc. A financial advisor brings an unbiased insight to your personal situation.
Evan: Yes, and we see this a lot in people’s investment choices. One of the most common things we see are individuals who consider themselves to be conservative investors, or frankly should be conservative investors, but are allocated 80% to 90% equities and the rest in cash. Sometimes it turns out they started with a more appropriate asset location, but perhaps the equity portion grew significantly over the last few years and they never rebalanced. Sometimes it turns out there may be an emotional attachment to certain positions, either because they were employed by that company in the past or it’s been one of their biggest winners and they are afraid to take gains and sell.
Elean: Now, not all investment advisors provide the same level of service. Some financial advisors only pick investments for their clients and nothing else. Others only create financial plans but don’t provide the investment advice and some operate as a personal CFO to a few wealthy individuals and their families.
Evan: Correct. And just to give an example of our firm, we work with high net-worth individuals and their families. We take a holistic approach to their finances, often working as the primary advisor overseeing their other relationships. For example, we may not always manage our clients’ investment accounts, but we may oversee the work another investment advisor does and consults with them. We also work directly with accountants, attorneys, insurance agents, etc., to create and implement a family’s long term financial plan. A big area where we provide a lot of value is in working with an entire family whenever possible. That might mean working with their heirs or their siblings when their estate stretches beyond several generations, businesses or households.
Elean: I think, at the end of the day, over the course of several years, a lot of things change, whether it’s your personal life, the economy, tax laws, or the investment options available to you. Working with a financial professional can help you stay up to date with any changes that come along the way and can help protect you from being your own worst enemy during good and bad times.
Evan: One last point specifically related to being your own worst enemy, a financial advisor should understand your psychology of money. What I mean by that is they should work to understand your emotions and behavior when it comes to money to the point that everyone is aware of their psychology of money.
So with that, I hope this episode helped to shed some light as to why it may be beneficial to hire a financial professional. Your finances are important and they require the same amount of attention you give to other areas of your life, maybe even more. No matter what stage of life you’re in, working with a financial professional could help you along the way. So with that said, we want to thank you for tuning in to the Paragon Podcast.
Elean: Yes. And please subscribe to the podcast on Apple Podcasts and Stitcher Radio. Finally, I encourage you to visit our insights blog at paragonfinancialpartners.com/insights where we post a lot of our educational content. Thank you. And we’ll see you here next time.
Disclaimer: Paragon Financial Partners, Inc. is a registered SEC investment advisor. This broadcast is for informational purposes only and should not be considered as a solicitation or offer to purchase or sell securities. The financial strategies and guidelines discussed herein may not be appropriate for everyone as each individual circumstance is unique. Please review all tax information with your tax professional. Please review all legal information with your legal professional. We hope you enjoyed the Paragon Financial Partners podcast, and again, thank you for listening.
