Amid the COVID-19 pandemic, it’s difficult to plan ahead, especially when it comes to finances. However, some advisors call this the best time to think about your financial future. LN recently spoke with Nikki Newton, UMB Bank’s president of private wealth management, who shared how a financial advisor can help you evaluate where you are today – and where you want to be in years to come.
Why is it important – in today’s uncertain times – to have a financial advisor?
Amid today’s economic climate, the one thing you can control is how you react and how you’ve prepared, and an advisor can build your plan with these things in mind. If you’re left to your own devices and don’t have a plan, this could lead to knee-jerk reactions to developments, such as volatility in the stock market. A plan can help people not panic and remember that they’re still inside their band of risk tolerance.
Think about where we were a year ago versus now – you would have missed out on returns if you were scared. We’re not saying don’t pay attention to the stock market – if you have a plan, though, you can be less concerned about this current environment because plans are already designed with asset-price devaluation built in.
What is the difference between planning-led and portfolio-led management?
Whether you are thinking about job security, your retirement or your financial portfolio, uncertainty surrounds us right now. Simply counting on investment performance goals is not a true financial plan. Instead, focus on your personal plan and how well you are sticking to it. Planning-led needs to be more important than portfolio-led management, and times like these prove this concept.
How can financial advisors help clients today and for their financial futures?
A financial plan should fit your unique lifestyle, as well as your short- and long-term goals. [Advisors start with] a financial review of your current assets, debts and income to determine the variables that can influence your plan’s success. [Then,] discuss your concerns, especially how the current environment will impact your future, as well as your passions, plans and issues to help shape and define your financial journey. Some of these discussions will include your family, career, lifestyle and retirement goals.
An advisor can play a key role in not only helping to design your financial plan but empowering you [to] stick to it and adjust as needed to meet your financial goals.
UMB Bank, umb.com
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