A report from Securian (PDF) found that nearly a third of clients keep information from their financial advisors. Reasons vary from feeling things are too personal or embarrassing to believing that the information is not relevant to financial planning. Some respondents also thought that if their advisor knew the information, they’d be advised to do something they didn’t want to do.
Whatever the reason, keeping information from your financial advisor isn’t smart and may work against you in the long run. Here are four things you should be sure to discuss with your financial advisor.
Issues to Discuss With Your Financial Advisor
1. Health Concerns
Any sound financial plan will address health concerns. Even the healthiest people can expect some medical bills, especially as they age. But those with serious or ongoing problems have to be especially careful when it comes to planning for the future.
Tell your financial advisor if you or a family member has a chronic illness or mental health issue. Also tell your advisor about addictions that need treatment. Yes, this is very personal. But by telling your advisor and addressing the issue head on, you can feel confident that you will have the resources you’ll need in the future.
2. Sensitive Investments or Debts
After health concerns, private investments was the most unreported category in the survey. Also on the list: personal loans to friends and family members, debt incurred, and stocks and real estate purchased.
These topics are clearly relevant to a financial advisor’s mission to make a plan for you and your family, so don’t keep them secret. An advisor you like and trust won’t give you grief for having made a bad investment or for having “loaned” (read: given) money to a friend you know you’ll never see again. Instead, they will help you figure out how to best manage the investments you’ve made or recoup some of your losses. And if you’re in debt, your advisor can help you make a plan to reduce it.
3. Family Matters
In the survey, reasons for not disclosing information to advisors included “too personal” (51.5%), believing it was irrelevant to financial planning (44.7%), and embarrassment (20.4%).
Divorce, separation, and marital difficulties clearly fall in the “personal” category. But that doesn’t mean they aren’t relevant to your financial life. Especially if you’re on the brink of divorce, discuss it with your planner immediately.
4. Job Changes
Changes in employment for you or your spouse should be reported, whether it’s a layoff or a new opportunity. If you’re going to see a reduction or increase in income, that needs to be factored into your plan.
Work With an Advisor You Trust
It can be hard to share personal information with others. But remember that these people are professionals. And if your financial advisor doesn’t have the full picture, they can’t give you sound financial advice. The solution is to work with a financial advisor you trust, even if that means meeting with a few people before selecting the person you feel most comfortable with. Address your concerns about confidentiality and ask them about their client confidentiality policy.
