A few weeks ago I reached out to all of you to let you know about our recent name change to WealthSmith Financial Planning. Many of you responded with positive feedback, so I thank you for that!
As an added bonus, many of you also sent requests for me to meet with people that you care about so that they can share the positive experience that you enjoy as part of the WealthSmith Financial Planning family. I want to thank all of you who have referred me to people that you care about.
You have made my task easier, in ways that you may not even realize. When you ask me to meet with people that you care about, there is a level of trust and comfort that is already built into the Advisor-Client relationship.
We all know about perils that we can see, such as “don’t put your hand on a hot stove”; or “don’t go golfing in a thunderstorm”. These are easy every-day activities that we know how to avoid. But what about the perils that are lurking in the financial world that are not so obvious?
Let me give you an example of how one family member referring me to another family member has helped uncover unknown perils that, if not for the referral to me, would have been left unchecked and free to wreak havoc on one of my client’s financial plans.
Let me share a couple of stories with you.
A client of mine, age 46, referred me to his parents. They were “this close” to putting all of their retirement money ($400,000 +) into a product that would have tied up their funds for 18 years. The ages of this couple were 73 and 67, and their money would have had penalties if it was withdrawn for 18 years!
Do the math: the father would have been 91 before his money would have been penalty free! Were the parents uneducated? No, they were not. So why would they invest in something like this?
Because they were not asking the right questions, and they trusted a financial representative to be looking out for their best interests, when, in reality, the agent was looking out for her best interests.
…They never thought to ask about withdrawal penalties, so the agent never brought them up. The commission that the agent would have made was around 8% on the $400,000, or $32,000.
Think about how you would react if you found out 5 years down the road that your parents were filled with anxiety because they invested in a financial product that tied up their money during their golden years. How angry would you be if someone did this to your parents?
In another scenario, a client of mine age 62, referred me to her adult daughter. Her daughter was recently separated and was going to work through the divorce process with her estranged husband without the benefit of legal counsel. She was going to move out, and her ex-husband was going to assume the mortgage and take over the house. She didn’t know that she was still going to be responsible for that mortgage, and that she would not be able to get a loan to buy a new house because her income would not support the existing mortgage and the new one.
…If she had continued down this path, there were four major issues that I was able to point out to her that would have prohibited her from moving forward with her life, financially and emotionally.
Think about how you would react if your adult child were filled with remorse and despair because they unknowingly signed a divorce agreement that tied their hands financially for years to come.
My favorite saying holds true: YOUR financial plan is only as strong as the financial plan of someone in your life that you may have to take care of. Are the financial plans of your family members as strong as yours? Are they depending on you to carry out their wishes based on a faulty financial plan?
Don’t keep us a secret! If you have friends or family who are not currently part of the WealthSmith Financial Planning Family, we’d love to talk to them. Call or email us, and put us in touch with the people whose financial plans depend on you! We look forward to working with them.
Happy Fourth of July, be safe!