ReBuilding Wealth

Many people are now in transition and having a hard time putting recent events in perspective. Are you feeling battered and bruised from the recent loss of wealth, and feel like you are behind where you thought that you would be at this stage of life? As a result, do you feel restricted, that you have fewer options, a narrower vision for your future? On the extreme end, some feel that they have lost the game and become despondent. I have observed that negative feelings such as these arise when people define wealth on one dimension (money). Money is important however, True Wealth is multidimensional, it more than money. It is the net summation of all the resources that you have to create the life you desire. Your True wealth is a combination of your talents, your wisdom, your time, your body and mind, your network of friends and family and not just your balance sheet. When we re-assess wealth in this fashion, many of us will find that we have dramatically grown our wealth in the past two years. We have increased our wisdom about what really matters in life and what we can and cannot control. We have sharpened our talents out of necessity. We have expanded our networks as we look to rebuild our business. We have focused our time on what matters most to us. The loss of our financial wealth, for many of us, is likely temporary while the gains in our other areas of wealth are lasting. Most of the time, money and wealth creation are a natural consequence of pursuing what matters most to us: our life priorities. It is helpful to first sort through our life priorities, what we hope to achieve in our lifetime. I recently completed this exercise myself and my top five priorities are (1)physical and emotional health, (2)my relationship with my wife, (3)being a great parent for my children (4)using my Unique Genius, and (5)having fun. I also have other priorities that are relevant to me such as sharing happy and loving relationships with family, friends and an overall comfortable life with fewer commitments which allows me to grow spiritually and with a greater sense of freedom. When I focused on what matters most to me, what I found was that most of them are non-financial. When we focus on what matters most to us and we realize how little of it is tied to our balance sheet, we feel better, more centered, we perceive more options and can start to imagine a better future. We become more aware of opportunities that surround us. Perhaps there are more today than a couple of years ago. As everyone retrenches in poor market conditions, this may be your chance to harness all of your resources and surge forward. Perhaps a time build relationships with people who were too busy before. It’s a time to discover your resilience and resourcefulness and deploy in new and meaningful ways. It’s a time to build, build what truly matters to you.

A Financial Advisor For Me

Your goal when looking for a financial advisor : you would like to find a GREAT financial advisor.

There are certain basic characteristics that one should expect a financial advisor to have – honesty, empathy, competence, experience, being appropriately qualified and one who would be willing to be your advocate at all times. 

How does a person go about finding a financial advisor?  Typically, people start by asking their network of family and friends, peers, colleagues and business partners. Some peruse through listings and advertisements or rely on personal wisdom and knowledge of the financial industry. Based on the gathered information from different sources, research, assessing the reputation of an advisor or firm and finally by interviewing a financial advisor, most people conclude whether a financial advisor can do a great job for them.

However, many people fail to recognize that there is a personal relationship dimension that one should consider when hiring a financial advisor. If one wishes to develop a long term, successful and rewarding partnership with a financial advisor, one needs to delve deeper into the motivations and expectations on both sides.

Depending on your stage in life, your circumstances and level of wealth, a particular type of relationship may be most appealing to you. There are three different financial advisory models today that have fundamental differences in the way the advisor-client relationship is structured (*). The following table can help you decide.

  

What would you like your advisor to do for you? Check on the box that best describes your expectations of your advisor. 

Your ADVISOR	Sales Model	Advice Model	Partner Model
On Investments	Sells you a great product	Informs you about attributes of particular investments	Listens & focuses on your desires and needs before recommending
On The Process	TACTICAL  Provides Buy and Sell recommendations	COMPREHENSIVE Provides planning, investment management services	STRATEGIC Defines priorities and Executes the best fit solution
On Financial Planning	Has a specific Proposition	Has a Planning Process	Has a Turnkey System to Create Opportunities
On Focus	Has a Short Term Focus	Has an Annual Focus	Has a Lifetime Focus
On Style	FEAR BASED Points out the big mistakes you may be making, advise on tactics and tools	OPTIONS BASED Provides you with multiple options to achieve your goals	VISION BASED  Inspires you to define your overarching mission and vision
Insights	Limited insights	Shares personal insights	Helps you gain insights
Compensation	Transaction oriented   -Trades value for commission	Fee Oriented -is paid a fixed amount per plan or work	Relationship oriented  -gets paid for wisdom
The Approach	Is Individualistic	Delegates work to experts	Is a Leader of an integrated Team
Overall relationship	One Dimensional Product oriented	Two Dimensional service & process oriented	Multidimensional and Intimate
Communication	Inform to Solicit sales	Provide Consultation	Promote Reflection & Results

The Sales model is typical of who is commonly called the insurance or stock broker. The advice model is usually the forte’ of smaller independent fee based advisory firms.  However, it is estimated that less than 100 firms fall under the emerging Partner Model in the US today.

If you are looking for a financial advisor in the US, tell us the Advisor Model that is the best fit for you right now and we would be glad to assist you. Contact us by email:  Darren.laporte@gvfinancial.com. On the Subject line, please include:  A Financial Advisor for Me.

*The structure and contents of this article are built upon the foundation of “advisor styles grid”  by T. Fithian & S. Fithian. 2007. “The Right Side of the Table”. Special thanks to Todd Fithian, CEO of The Legacy Companies, Boston who has generously granted permission to use his work for this article.

The Happiness Threshold

I spend a lot of time talking with people about the relationship between money and happiness.  Several psychological studies suggest that beyond a certain level of income having more money does not add appreciably to one’s level of happiness.  I have taken my own informal survey to test where people I meet believe that threshold is.  To my surprise, most people correctly identify the happiness threshold as reported in these studies, somewhere between $100,000 and $150,000 a year.  If people understand that more money likely will not add to their level of happiness, and they already have more than enough wealth to meet that threshold, then why do we care so much how much money we have?

One possible explanation is that we still operate from a faulty paradigm about money.  In the  last blog titled: Money, Friend or Foe , I discussed what money means to us. Although we may understand intellectually that money does not mean security, freedom, or a way to keep score, perhaps we have not yet accepted these fundamental truths on an emotional level.  For those who have spent much of their lives climbing to the pinnacle of wealth, believing that making money was the goal, and sacrificing much to achieve that goal, such a radical shift of thought threatens to unravel our world view of success and our self-image.  If we are not among Tom Wolfe’s elite “Masters of The Universe,” then who are we and what is our life’s purpose?