Imagine for a moment your favorite team sport. A team is a group of individuals working together to accomplish a common goal. That goal for a sports team is to win. Now think about all of the personality dynamics; how much potential there is for conflict, disagreement or ego to get in the way of the common goal. There are numerous examples that we all can think of in the world of sports. There’s no “I” in team, right? Whenever a player begins playing the game for self-interest, everything starts to break down. Often, the coach has to mediate and rally his team to remind everyone that winning is the objective and the only path to victory is to work together.
What about your financial team?
Have you considered that you engage a suite of professionals to accomplish various things and rarely do these people interact, let alone proactively work together to win the game? You have a financial advisor, tax professional, a mortgage consultant or real estate agent as well as an insurance broker, just to name a few. We all pay skilled professionals to perform duties but they do so completely isolated from each other. This is a team without a coach. The result could be a misinformed decision that could be costly. For example, you ask your tax professional how you can mitigate some taxes this year. He/she has no knowledge of your other comprehensive financial plans and suggests you buy something or make a donation. What Mr. or Mrs. tax professional did not know is that you are behind on your retirement savings and should be making a sizeable contribution to your retirement plan instead.
How Do You Look For A Financial Coach?
First, only work with an advisor that acts as a coach to their client’s team of financial professionals. They should proactively engage the tax professional to know what we need to plan for come tax time. Secondly, your coach should be involved in real estate decisions: how much can you afford, when you should buy versus rent, what type of mortgage is the right one? Then the advisor can coordinate with the mortgage and real estate people to ensure continuity. Your coach should also make sure you call your insurance broker once per year to evaluate costs and coverage needs. As the financial coach coordinates with the team, they allow star players to shine in what they do best; but without the coach calling the plays and managing the team, everyone is making decisions void of the common goal. It’s the game of life we are talking about here. Do you want to win?