Just like it’s not a good idea to hide things from your spouse or your doctor, you shouldn’t conceal the truth from your financial planner. Here are the 5 most important things to come clean about with your financial planner:
- Debt. Depending on the amount, hidden debt could totally interfere with your ability to reach your retirement and other long-term goals. Whether it’s credit card debt or a loan, disclosing it to both your spouse and your financial advisor is important, so your advisor can adjust your plan and help you figure out a way to meet your goals.
- Family issues. These mainly come into play when looking at how much you want to leave your children. If you have a child with an addiction or who consistently makes bad financial and personal decisions, you should disclose this to your financial planner. Your advisor can help you set up a trust or other vehicle that stipulates how much your child can take from their inheritance at set points in time, instead of that child inheriting a large sum all at once.
- Health concerns. It’s never a good idea to hide any major health issues from your financial planner. Your plan is set on particular assumptions about your ability to fund it and also uses your life expectancy to determine your ultimate investment goal. If either of these are affected by a health issue, it can totally derail your plan.
- Assets. While you might think a hidden stash of cash or stock isn’t so bad because it ultimately increases your worth, it can throw your financial plan astray. Your planner takes into consideration your risk tolerance and suggests investments based on this.
- Unexplained expectations. Some investors are aggressive, others just passive aggressive – and don’t share what they really want. Years may pass with the client feeling unsatisfied, but they may want to hide their true feelings. Once a client gets the point where they have to hide how they feel, that’s usually the beginning of the end of the relationship with their financial advisor.
Rani Jarkas, the founder of Cedrus Investments, is a highly experienced and accomplished financial services executive. Rani Tarek Jarkas and his firm render quality, customized, complete suite of strategic advisory and investment banking services to innovative and emerging technology companies worldwide.