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How Often Should I Hear From My Financial Advisor?

Olivia Stacey, CFA
Jul 21, 2020

Financial WorryWe're now in the seventh month of the year 2020. A year that's brought quite a bit of discomfort, to say the least. I don't need to remind you that one side effect from the myriad of distressing events this year has been a financial market environment that resembles the most rickety, terrifying roller coaster ride that Cedar Point has to offer. This is a great example of a time when it’s comforting to know that your financial advisor is standing on solid ground, holding your keys and purse so you don't lose them on the wild ride. Wouldn't it be great if they could hold on to your sanity as well?

If you’ve weathered the recent storm without the guiding hand of an experienced financial advisor, the volatile ups and downs may have been the push you needed to finally find one. Someone who will calm your anxieties during times of market tumult, or better yet, set you up with enough confidence to stay calm no matter how bumpy the ride gets. Perhaps you’re wondering what you should expect from a financial advisor during times like these.

When I began working in this industry, someone older and wiser told me that the only thing that matters more to people than their money is their children. With that in mind, allow me to metaphorically liken your money to your beloved dog, Penny (who happens to rank just below your kiddos on the importance scale).

Imagine that you have hired a professional to care for Penny while you’re at work or travelling. This person walks Penny, plays with her, feeds her, and makes sure bigger dogs don’t hurt Penny at the dog park. Now, what's an appropriate level of interactions between you and Penny's caretaker? Let’s explore three options:

1. Over-Communication

Months down the road, you realize that Penny's caretaker has been calling frequently saying things like, “Penny didn’t eat all of her food today, but don’t worry, I’m taking good care of her.” And, “Penny went to the bathroom twice more than usual today, but don’t be alarmed, I have everything under control.” These calls aren’t cause for much concern but, you’ve found yourself worrying about Penny more than you expected to since hiring someone to watch over her.

You can probably guess what I’m getting at. If you’ve made the leap (or are in the consideration process) to hire a financial advisor, you want to trust that this person is doing their job without needing to reassure you at every crack in the pavement. Because, just as your dog walker reaching out daily to assure you Penny is fine, frequent calls from your financial advisor unconsciously sow seeds of doubt in your mind. The hope is that you’ve put your financial well-being in the hands of a professional who has your best interests at heart. Someone who will do the worrying for you, so that you can focus on your life.

2. Under-Communication

Not long after you've hired Penny’s caretaker you realize they don't seem interested in taking the time to discuss your concerns pertaining to her overall disposition. They seem content to arrive at your house, make sure she has a pulse, throw a bowl of food in front of her, and go about their day. When you press for details they give you just enough information to get you off the phone. You love Penny dearly and you need a bit of reassurance that she’s happy even when you’re not around.

While a call from your financial advisor every time there's a minor market movement generates more anxiety than it soothes, an absentee advisor is far from ideal. If your advisor can't be bothered to assuage your market fears, they are failing at an essential task: granting you peace of mind.

3. The Sweet Spot

The ability to hand over your prized possessions (whether it be your dog or your money) and not look back is impossible for most of us. However, when you pay for a service, you expect the hired professional to take most of the worry off your plate. There's a fine line between under and over-communication and that's where these nuanced, service-based relationships lie.

When it comes to your life savings, you want to feel confident your money is in good hands. However, there will be times (hello, 2020) when your anxiety will overcome your rational mind and you'll seek comfort from your advisor. In that case, they should be there with open ears and plenty of time to listen.

To get the most out of your relationship with your advisor, you'll want to be honest and up front about your communication expectations and how much of a "worrier" you are. The more insight you give them on your concerns and goals, the better they can serve you. A good financial advisor will make sure that you have at least a dollar in the bank on the day you die. A great financial advisor is someone who takes the time to learn where your fears and anxieties lie and not only do what’s best for your finances but consider your emotional well-being in the process.

The truth is, when your plan is designed to handle market turbulence, and if there hasn’t been a material change to your financial situation, there’s not much for you and your advisor to discuss on any given day. While you’re kicking back with that new book you've been eyeing, they’re doing their job, guided by the plan you put down together.

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Olivia Stacey is a Portfolio Manager at Exchange Capital Managementa fee-only, fiduciary financial planning firm. She also writes with our Investment Team: The West Wing. The opinions expressed in this article are her own.