Financial advisors are often perceived as stock pickers and investment managers. But especially at Dominion Financial Advisors, we believe that financial planning goes far beyond investments; it’s about creating a thoughtful path to achieve, grow, and protect your financial freedom, enabling you to accomplish your life goals.
When we refer to a financial advisor, we’re referring to a fiduciary financial advisor and their firm, who are legally required to avoid conflicts of interest and to always work in your best interests. They aren’t stockbrokers, they don’t sell insurance, and they don’t sell annuities. Instead, they are fee-only advisors who are paid only for their financial advice. Beware, most “financial advisors” don’t meet this standard.
But for financial advisors like us, there’s a world of subtle expertise and nuanced support that remains largely unnoticed by the public. Here, we uncover ten things financial advisors do that people rarely realize—illuminating the true value they offer beyond the visible surface.
Goal Planning
A good financial plan requires beginning with the end in mind. Your advisor should strive to understand your goals and help you define the goals that you can’t quite put into words. Your advisor should help you to prioritize your goals and craft a financial plan that is designed to achieve them. Life happens and circumstances change, so you and your advisor should revisit your goals from time to time to make sure your plan is still aligned with them.
Life Transition Planning
Everyone has big events in their life, and your advisor must know about and account for them. Here are just a few examples: job change, retirement, marriage, divorce, kids, buying a buying a house, buying a business, and so much more. Financial advisors help clients navigate these moments by adjusting budgets, investments, insurance, and estate documents. Your financial advisor should offer tailored support, anticipating pitfalls and opportunities that most people overlook during significant life changes.
Evaluating Employee Benefits
Usually every fall, employees must choose among a smorgasbord of employee benefits. Which health insurance plan is right for you? Should you add employer-provided life insurance? Should you use a flex spending account or a health savings account—or neither? These are not standalone decisions because they affect your taxes, your take home pay, and your overall insurance and protection plan. Your financial advisor should review your options and help you choose among them.
Education Planning
Whether you’re planning for college or private K-12 education, the sooner you incorporate this into your overall financial plan, the better. So, you and your advisor should talk about the pros and cons of the many different investment vehicles available for education savings. You should talk about applicable tax credits. You should talk about targeted schools. And so much more—so that you can achieve your education-related goals, your retirement goals, and your other goals.
Insurance and Protection Planning
Fiduciary financial advisors don’t sell insurance of any kind, but we do review your insurance needs and your current coverages so that we can make recommendations. This includes the basics like auto, home, and health insurance. It also includes life, disability, long-term care, and other insurance coverages. And your advisor may recommend ways to mitigate some risks without purchasing additional insurance.
Tax Optimization Strategies
Your financial advisor should recommend tax-efficient investment accounts, suggest strategic withdrawals to minimize tax burdens, and coordinate tax-loss harvesting. Your advisor should also collaborate with your accountant to ensure that you aren’t missing out on deductions, credits, and other opportunities to legally reduce tax liabilities.
Risk Assessment and Suitability Considerations
Financial advisors don’t just look at investments; we evaluate your entire risk profile. This includes assessing adequate insurance coverage, analyzing cash flow vulnerabilities, and stress-testing portfolios against economic downturns.
And when it does come to investing, it can’t be done in a vacuum. Investment decisions must account for your entire risk profile, your comfortability with risk, your capacity to take on risk, and the suitability of investments for your situation. Your advisor should help you assess and monitor all of these considerations.
Coordination with Other Professionals
Successful financial planning often requires the expertise of several professionals: accountants, attorneys, mortgage brokers, and more. Financial advisors act as a linchpin, coordinating between these parties to streamline client objectives. We ensure everyone is on the same page, preventing miscommunications and maximizing the benefits of each professional’s input. Your financial advisor should act as the quarterback of your financial team.
Adhering to a Code of Ethics
Registered Investment Advisers—technically, that’s what firms like Dominion Financial Advisors are–must have a written code of ethics that establishes standards of conduct reflecting their fiduciary duty to clients and requires compliance with federal securities laws, according to SEC Rule 204A-1 under the Investment Advisers Act of 1940. We can provide a copy of this to you at your request.
Continuing Education
Most states and many professional organizations require financial advisors to complete period continuing education on an ongoing basis. This helps us stay on top of new techniques, laws, regulations, and ways to serve our clients the best we can. Just as we like to teach and educate our clients, our own education is never ending.
Conclusion
The role of a financial advisor extends far beyond the traditional image of market prediction and retirement planning. We act as educators, coordinators, strategists, and confidants, offering a wealth of services that most people never see. By acknowledging these hidden dimensions, clients can better appreciate the value of professional guidance and make the most of their financial journeys. Whether guiding through turbulent times, optimizing taxes, or coordinating life transitions, financial advisors are silent architects behind countless stories of financial success.
At Dominion Financial Advisors, we help you remember why you’re doing what you’re doing, and keep you focused on the long term instead of what feels good now. Schedule a complimentary consultation with us to see how we can work together to plan your financial future.