What All Financial Advisors Should Do (but Don’t): Analyze Your Financial Risks
You’re moving along in life. You’re taking care of your family, progressing at your job, making good use of your paycheck, and advancing toward your goals.
Then, bam. Life changes. There might be a car accident, a medical diagnosis, a layoff, or a death in the family. And now your forward momentum comes to a standstill as you grapple with this big life change. That change inevitably affects your finances.
Are you prepared? If you have a financial advisor, you should be. And if they haven’t prepared you, you might consider hiring a different advisor.
Every financial advisor worth the money you pay them should scour your financial situation for potential risks. They should sit down with you and talk about those risks and recommend how to protect against them.
To give you an idea of what a financial advisor should assess, here are areas we would explore with you as our client:
Life Insurance
How much life insurance should you carry? How long should you have it? Do you need it once you retire?
We analyze your financial and life situation and legacy goals to recommend the amount of insurance that can help safeguard those goals.
Since we are a fee-only, fiduciary Registered Investment Advisor, we do not sell any insurance products. We coordinate with your existing insurance agent on your behalf. If you don’t have an agent, we can refer you to one.
Long-Term Care Insurance
Long-term care insurance is pricey—but can you afford not to have it?
The cost of skilled care can drain a savings account quickly, so we try to have long-term care discussions with clients long before they need the service. Working with you, we help you decide how you will pay for it if the need arises.
If you plan to pay for it on your own, we help adjust your cash flow plan to include a long-term care savings fund. If you opt for insurance, we help you pick the appropriate option on the open marketplace.
Disability Insurance
A sudden medical diagnosis, an injury—these can leave you unable to support your family. Hopefully, you would get back to your career soon, but sometimes our bodies need time to heal. Sometimes our change in circumstance is permanent.
Disability insurance helps support you and your family when you cannot. We help determine the effect short- or long-term disability could have on your finances and future retirement. We advise on the appropriate coverage and whether your employer-provided policy is adequate.
Health Insurance
Like your disability coverage, we look at whether you have adequate health insurance given your situation and goals. For example, if you plan to retire early, what will you do for health insurance before Medicare kicks in? We help you make these decisions.
Before you sign up for Medicare, we help you evaluate the options and whether private coverage is needed as well.
Evaluating the Costs
Insurance can be costly, and so is not having it. What’s the balance for you? Your financial advisor should help you determine this balance point. They should also check for options that save you money.
Our Greenwood Village, Colorado financial planning firm continually checks how much a client is paying in insurance and whether comparable but less expensive policies exist in the open market. Since our goal is to help our clients keep more of their money, we think this kind of oversight is essential as a financial advisor.
Our Greenwood Village fiduciary financial advisory firm offers a complimentary 15-minute call. We can briefly discuss your financial situation and concerns and share how we may be able to help.
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