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  • Writer's pictureBridget Sullivan Mermel CFP(R) CPA

The Value of Hiring a Financial Advisor for the Non-Super-Rich

In this episode of Friends Talk Financial Planning, John and Bridget discuss the benefits of hiring a financial advisor and how it can be valuable for regular people. They cover various aspects of financial advising and when it might be the right time to seek professional help. In this episode, John and Bridget discuss the different types of financial advisors, such as financial coaches and financial therapists, and how they can help individuals at various stages of their financial journey.

John and Bridget also share insights on how financial therapy can help couples navigate the emotional side of money management and financial decision-making. They emphasize the importance of hiring the right financial advisor based on individual needs and specific financial complexities. The discussion delves into the value of seeking financial help, even for basic budgeting and financial management, when individuals feel they have hit their "ceiling of complexity." Finally they emphasize the significance of seeking financial advice when making high-stakes decisions that can impact one's financial future.

Other episodes you might be interested in:

Why We Became Fee-Only Financial Planners | We Share our Stories

Investment Management vs Financial Planning | Making Jargon Arrests!

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John: Is having a financial advisor just for the super-rich? In today's episode of Friends Talk Financial Planning, we'll discuss how regular people can benefit from having a financial advisor and how to think about when you might want to hire a financial advisor. Hi, I'm John Scherer, and I run a fee-only financial planning practice in Middleton, Wisconsin.

Bridget: And I'm Bridget Sullivan Mermel, and I've got a fee-only financial planning practice in Chicago, Illinois. Before we start talking about hiring a financial planner or financial advisor, please subscribe. It helps us with our YouTube statistics. All right, John, so let's get into this topic about hiring a financial advisor. I think there's a lot of intimidation about it, and there's a lot of variety in the industry, and I don't know if everybody's aware of it. And so that's one of the reasons why we're doing this episode. So, John, let's talk about the first reason you might be interested in hiring somebody.

John: Yeah. I love this topic. I talk with people who say, “I'm not rich. I can't do those sorts of things.” And frankly, when I got into the business a long time ago, it was sort of like, listen, you kind of had to be rich or at least have a certain amount of money. I remember thinking, “Jeez, I don't know anyone who has that much dough. Can I really help folks?” And maybe I was right or wrong with that thought process back in 2001, but for sure, today, you don't need to be rich. And so, here’re some examples.

One of the things that I think about is there's an area of our world, and, Bridget, as you know, when you say financial planner or financial advisor, it can mean so many different things. We kind of have this one picture in our head, but there are so many different things. I thought it might be useful to talk about what some of those things are. And one of them that comes to mind for me is we'd call it a financial coach, where somebody really helps you out on a day-to-day basis, doing things like figuring out your budget and how to pay off debt and more.

Some of the strategic nuts and bolts sort of things where that's not exactly what I do in my practice. I don't think it is what you do in yours specifically. We do some of that. But there are some folks that you might go to if maybe I’m just starting off and need some help just getting in that right direction, or maybe I've been working for a while and golly, I'm making good money, and I just can't seem to get traction. Maybe having somebody that helps you monthly, quarterly, or weekly with things can be beneficial. There's a place for that. And you don't have to have all kinds of money for that to be really useful.

Bridget: Right. The things that you can get help with are things like, let me set this up so I can track my spending. I know what I'm spending. I've got a budget, and I'm spending the money on the stuff that I want to be spending it on, not on stuff that I really don't care about. And I want to make sure that I'm saving enough. A lot of times these can be people who are just starting out or just going through a big transition in their life.

It could be somebody who just got married or just got divorced. We have a lot of transitions in our life. Maybe I'm making more money, and it just seems to evaporate; I don't know where it's going. For those kinds of questions, I think a financial coach can help you with the nuts and bolts of the basic bookkeeping of life. I think those are the reasons why you look for a financial coach.

John: And you brought up changes in life. And one of them you mentioned was getting married. And I think that leads to another thing in the realm of financial advising, and that is financial therapy. And often cases when a person gets married or two people get married, I guess one person can't really get married 😊 When you get married, now I've got my way of thinking about money in the world, and you've got your way of thinking now we got to put them together in some fashion. And it's not necessarily about nuts and bolts and how do we save and spend. It can be some of that, but more, how do we think about it?

How do we work together to help figure out what's important to us, not just me. Money is one of the biggest factors in marital unhappiness, in divorces and things like that. And there's a reason for it because it's emotional. It doesn't have anything to do with investment return and taxes or how much we save and different things, but it has to do with this emotional side, where therapy can really help folks. Every now and again I'll have some people come into my office and they'll say, “Jeez, are you a marriage counselor, because we got this issue.” That seems like one of the other places where you don't have to be a gazillionaire for that to be really beneficial.

Bridget: Yeah. I'm sure both of us have clients and that we help over the hump, but generally, you do financial counseling or financial therapy if there's a bigger hump to get over. For example, if you really have different financial styles than your spouse. And a lot of times, people tend to either act exactly like their parents did with money or exactly the opposite. And so then as a grown up, you might say, “Okay, if these are my two options, there must be a third option. I don't have to be my parents who are really frugal. I don't have to be totally frugal, or just a total spender.” It’s about striking the right balance. And again, a lot of times I see that you can kind of go along and be in denial with yourself, but once you get married and maybe have kids, then it can become bigger issues.

John: I love that you said, hey, if it's a bigger hump to get over, you might need some specialized help. And one of the things that I think a lot of people think about when they think financial planner is probably the work that you and I do on a more core basis, it's helping with tax planning on things, helping with investment planning, some of those sorts of things. And as I think about the things we've talked about—doing some financial coaching and some financial therapy—I do some of that, and I think you do too.

I do some coaching about some of the nuts and bolts. It's not the focus of what we do, but yeah, of course we do some of that. And my specialty is not in behavioral finance and helping people with the therapy side. Do we help people negotiate and work things out? Yes. But then when it gets to a certain level, you go, “Hey, wait a minute, I really need that specialty for somebody.” And some people, times people ask, “Hey, I think I need some help.”

Friends will oftentimes ask about things, and it really falls into that financial coaching side or maybe financial therapy. And I sort of relate it to being in the construction world. I’ve got a friend of mine, and he’s one of the owners of a big construction company, and they build hospitals and office complexes and those sorts of things. And if I went to him and say, “Hey, you're in the builder, right? Could you build a house for me?”

Well, yeah, it's probably a better deal to have him build a house for me than my dentist, but that's just not what those companies with the big cranes and the high-rise buildings do. And similarly, if you ask a house builder, “Hey, can you build an office building?” Well, I mean, yeah, he can probably do that better than my accountant can, but that's just not the right fit for things.

And that's one of the things that sounds kind of silly when you say it out loud. Of course, the guys with the big cranes aren't building single family houses. It’s really evident for construction but in our world, it's a little less evident because of some of the language issues and some of the jargon sort of things where if you're a financial advisor or a financial planner it can mean so many different things. And I think you need to be specific about it.

Bridget: Right. But then let's talk about when it does make sense to hire a financial planner or a more traditional financial advisor. And the big thing I see is when you're going through transitions in life, and there's what I think of as a ceiling of complexity. It's just kind of too complicated for you to be able to figure out on your own. In my personal business, we see this with people that are around five years before retirement. They've been handling it decently themselves, and then they get to five years of retirement, and it seems like it's just kind of too much. There're too many factors.

Another thing that I see often is people who get paid with equity compensation, so they get pieces of shares of stock, either stock options or restricted stock. There's this whole ethos in these companies. There're people that seem to say they know what they're doing with these, but most people really don't. And so, if they're honest with themselves, they say, “I don't know. I want to take advantage of this, but I have no idea what I'm doing with this.” And so, again, that's a feeling of complexity that we help people out with all the time.

John: I love that idea. And I'll tell you, we get a lot of those folks, too. Hey, I've been doing okay. Now it's getting more complex. I've got stock options. Golly. Got this retirement thing coming in. But even on a lower scale than that. For some folks, just this whole idea of budgeting and tracking and saving for retirement is difficult. If it's not natural for you, it might be at the very basic level where you go, “Okay, wait a minute. I've hit my ceiling of complexity already.” I kind of relate it to doing things around the house.

For some of us, if it's anything more than jiggling the handle on the toilet, I'm out. And there're other people who are very different. I know your husband's great at fixing things. Replacing the toilet. Great. I can do that. No problem. You might go, “Wait a minute. There's a couple of different levels here of things.” And it's not wrong to go, “You know what? I need some coaching right from the start. I'm already at my sitting of complexity.” That's totally cool. And you can get help doing that.

Bridget: I can learn, but I don't really want to. I want to spend my time doing something else.

John: And that's the other thing, too. Some people just don’t have the time. Your husband can put a toilet in, but it's probably going to take him all day compared to having a pro do it in an hour. And then the other people who can benefit from financial advice are those who can do it but don't like to. For me personally, I like cutting the grass at my house. I can hire somebody to do it, but I kind of enjoy it. I don't like replacing the toilet.

I could do it, but that would be a bummer. So, even though I can do it, man, maybe I want somebody to come in. I can manage my finances and get there, but you know what, that really drains my energy. I'd rather pay somebody else to do it for me. And again, you don't have to be super rich for that to be really valuable for you.

Bridget: Yeah. And then the last thing is to ask, “What are the stakes?” And so, when you get to five years before retirement, there're decisions that you're probably going to make that are high stakes. They'll affect the rest of your life. And same with when you're younger, if you're getting paid with compensation, you say, “Oh, wow, I'm getting a lot of Google stock. What do I do?” That could affect the rest of your life. And so that's a higher stakes decision for which you might say, “Okay, let me get some help with this.” That’s different than if you’re procrastinating on this or that, but you know, implicitly that you'll still probably be okay, because you’re not making these major decisions that could impact your future.

John: Yeah, I love that. If you're 35 and wondering how much you should save for retirement, you got some runway to figure that out and make changes in it. If you're getting into retirement, you've got to make your money last the rest of your life and you're not going to earn any more money the rest of your life, it’s a little bit higher stakes. Going back to the house analogy, I can maybe fix a faucet, but rewiring my whole house, the chances of me doing something wrong and starting it, burning it down or electrocuting myself, make for a little higher stake, so maybe I want to hire somebody else to do that stuff.

Bridget: Right. I think that's a great place to wrap it up, John. I'm Bridget Sullivan Mermel. I've got a fee-only financial planning practice in Chicago, Illinois.

John: And I'm John Scherer. I've got a fee-only financial planning practice in Middleton, Wisconsin. Both Bridget and I are taking on new clients. We'd love to talk to you if what we say is appealing. And we're also both members of the Alliance of Comprehensive Planners, which is a group of fee-only planners across the country, so if you want to find somebody who thinks like us in your area, check out

Bridget: And please subscribe.


At Sullivan Mermel, Inc., we are fee-only financial planners located in Chicago, Illinois serving clients in Chicago and throughout the nation. We meet both in-person in our Chicago office and virtually through video conferencing and secure file transfer.


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