You share your darkest money secrets with your financial planner. You even tell him about the time you spent your last pennies at Starbucks, because without caffeine, how could you work? This is the person who is supposed to sort out your life so that you can buy everything your heart desires, after all—or so we want to believe. We found out whether financial planners judge your shoe-buying habit, whether they get mad if they have to repeat themselves time and time again (we hear what we want to hear), and why they don’t always follow their own advice.
1. SOMETIMES, THEY GET A LITTLE ANNOYED WITH YOU.
“I grimace when friends or clients get involved with multi-level marketing endeavors, thinking it’s a quick way to make money,” says Quentara Costa, a certified financial planner in Massachusetts. These MLMs, including LuLaRoe, Matilda Jane, and others, rarely last more than a year, but according to Costa, the outlay of funds and time you pour into developing and understanding the product could have been better spent pursuing other means of career development. “While well-intentioned, it’s my least favorite method of supplementing income because it can take years to develop business and trust within the community, as with any business venture,” he explains.
2. THEY DON’T ALWAYS APPROVE OF YOUR CAR-BUYING WAYS.
Meghan Chomut, a certified financial planner in Thunder Bay, Ontario, says she can’t stand it when her clients overspend on vehicles. She even has a golden rule about it: The total value of all your vehicles and motorized toys shouldn’t add up to more than half of your annual income.
3. BUT THEY UNDERSTAND THAT YOU’RE GOING TO FORGET ABOUT SAVING MONEY DURING YOUR VACATIONS.
This is the time when clients tend to go off the rails, says Bill Ryon, co-founder and managing partner of the Dover, Delaware-based Compass Investment Advisors. Whenever Ryon sees clients taking distributions that are larger than what’s called for within their financial savings plan, he knows that they’re going on an international trip. “It can be a little bit of a sensitive conversation, since it is their money and I want them to enjoy themselves," he says, "however not at the expense of derailing their plan or jeopardizing their lifestyle in the future."
4. THEY BLAME YOLO.
“If you can’t afford it, you shouldn’t do it,” Chomut says. “But then #YOLO, and all of a sudden, you’ve booked a trip to Florida. Or #FOMO you are going out to eat at a fancy restaurant with friends and putting it on a credit card," she says. "The struggle is real.”
5. THEY TOTALLY EXPECT TO REPEAT THEIR ADVICE OVER AND OVER AGAIN.
Warren Ward, senior planner with WWA Planning and Investments in Indiana, says that many years ago, his doctor told him that about half the medical issues he dealt with in his practice were optional: people overate, refused to exercise, or smoked. But they still wanted their doctor to keep them healthy. “He responded by repeating his good advice, and making medical interventions when appropriate,” Ward says. “Just like that physician, we care about our clients, and will patiently repeat our advice at every visit, knowing from experience that people can change over time and become more financially healthy.”
6. EVERY FINANCIAL PLANNER HAS THEIR OWN FINANCIAL TRICKS TO PASS ON.
Ward is a huge fan of the “cash envelope system,” he says. Basically, you map out your spending for the week, and put that amount of cash into an envelope. “Mapping out your spending for the week allows you to know where your money goes instead of wondering where it went,” he says.
7. SOME WANT YOU TO FOCUS ON THE BIGGER PICTURE ...
“The secret is that all retirement planning is income planning and everything else is detail,” Ryon says. “I’ll have to repeat that several times, but that’s it. It helps them to focus on what’s really important and what they are planning for.” Essentially, he says, you’re saving and investing to sustain your lifestyle for at least 30 years after you retire. So if you focus on the fact that all of your retirement planning is income planning, then you’ll be able to think of your money as a machine that’ll pay the bills once you stop working.
8. ... OTHERS WANT YOU TO THINK ABOUT EVERY DOLLAR YOU SPEND.
The key is to make a budget every single month, Chomut says. “Every dollar overspent is a dollar you have to either work harder for tomorrow, or a sacrifice you’ll have to make later.”
9. THEY DON’T ALWAYS FOLLOW THEIR OWN ADVICE ...
Ward says that the most difficult part of financial planning is convincing his clients to plan for death. That means setting aside money for the kids’ education and naming a close friend or relative as a potential guardian for those children ... just in case. “Just like my clients, I’m slow to face updating my estate planning documents,” Ward says. We don’t blame him!
10. ... BUT THEY STILL WISH YOU WOULD TRUST THEM ...
“In our modern age of 24/7 news coverage, I think people tend to put too much emphasis on interpreting the latest headline, and then trying to act tactically in response,” Ward says. “Whether this involves making an investment decision based on world affairs, or following the weather minute-by-minute prior to a vacation, we prefer that they think strategically, formulate a plan and stick to it—of course allowing for periodic review and adjustment.”
11. ... BECAUSE AT THE END OF THE DAY, THEY’RE THE EXPERTS.
“I struggle watching one of a couple—usually the husband—claiming expertise that’s actually incomplete,” Ward says. After all, he doesn’t brag about medicine when he goes to the doctor, nor does he claim knowledge of the law if he visits a lawyer. “I try not to be judgmental, but this is an area where I struggle,” he says.