Sarah Kordon | Merriman

You’ve Decided to Donate – Now What?

by Sarah Kordon | May 16, 2023 | Advisors, Charitable Giving, Living Fully, Sarah Kordon, Tech Focus, Wealth Enhancement

There are more than one and a half million nonprofits in the U.S. and ten million worldwide. From supporting education and cancer research to protecting the environment and ensuring human rights for all, the list of worthy causes is endless. No wonder the process of deciding where you want to donate can be overwhelming!

As a financial planner, I have assisted many clients with achieving financial security, determining how much they can afford to give while balancing their other goals and evaluating the most tax-efficient method for their donations. After addressing all these questions, many people still struggle with deciding on which organization to choose. One of my clients recently came to me with exactly this issue. They had been donating for years in small amounts to numerous organizations, seemingly more and more each year as they discovered new causes they wanted to support. While spreading the love felt good, they had decided to consolidate their donations to make a greater impact in a single organization and weren’t sure how to narrow their selection.

Here is my advice to them, and it goes for anyone, whether you are donating for the first time, consolidating donations, or considering making a large gift: Begin by reflecting on your motivation for giving. Is it to improve your local community? Do you want to help people in circumstances similar to your own experiences? If, at some point in your life, you benefited from someone else’s donations—for example, through a scholarship, food pantry, counseling, or healthcare services—you may want to pay it forward. Perhaps you’re an animal lover or there is a specific current event that you feel passionate about, such as disaster relief, that can help narrow down your cause.

If you’re still having trouble selecting a specific cause, ask yourself whether you would prefer to donate to an organization that will directly impact your own local community or if you would prefer to focus on larger-scale issues. If you want to see change in your own community, is there something specific that stands out to you? Does your community have a large, unhoused population? Are the schools underfunded? Do the parks need an upgrade? Would you like to see a more significant local investment in the arts? If nothing immediately stands out to you, talk with friends and neighbors, or consider contacting your elected officials or local community impact groups for information on the most critical needs in your area. If you want to peruse local organizations, many states have great resources available to help. A couple of examples are Washington’s Give Big (www.wagives.org) and the Oregon Cultural Trust (www.culturaltrust.org).

If you don’t feel strongly about keeping your funds local, CharityNavigator.com is a wonderful resource that allows you to search by cause among thousands of charities. It also includes specially curated lists of organizations covering a variety of causes and current events. If searching among thousands of organizations feels overwhelming, Givewell.org is a nonprofit that highlights a few global charities that “save or improve lives the most per dollar.”

When considering impact, the size of the charitable organization can matter along with the size of your donation. A donation to a small organization could be the difference that helps that nonprofit keep its doors open for several more years, whereas it may just be a small drop in the bucket for a larger charity. On the other hand, large organizations can benefit from economies of scale, allowing them to reduce costs and deepen their impact. If you have concerns about the size of your donation or want to amplify it, try pooling it with like-minded people through a Giving Circle. You can start your own with a group of friends who share your values or join an existing group (find one in your area at www.philanthropytogether.org).

Once you have found an organization you are interested in donating to, you may want to familiarize yourself with it beyond its web page. I suggest scheduling a meeting with the executive director or board members for a one-on-one opportunity to hear the importance of the organization firsthand; learn about their current priorities, needs, and challenges; and have your questions answered. The larger the donation, the more personalized attention you can expect to receive. During this conversation, you can also determine whether you want your donation to be restricted to a certain area of their mission, directed to the endowment for a lasting impact, or made as an unrestricted donation the nonprofit can use as needed. For large donations, you may even be able to work with the organization to create a separate fund that aligns with the charity’s overall mission but can only be used for very specific purposes, which you determine.

One of the best ways to learn about a charity is to volunteer with them. You may want to start small by assisting with an event; but if you really want to understand the intricacies of their operations, challenges, and future path, joining the board will give you considerable insight and make your donation even more fulfilling because of your personal connection. I have certainly found this to be true in my work with the Eugene Education Foundation. As the mother of a student, the wife of a principal, and a board member, I feel very connected to the mission and know that our donations are going to support a worthwhile cause.

It is also important to make sure any organization you plan to donate to is a legitimate nonprofit and that they will use your donation responsibly. You can independently review its Form 990, financials, and annual report, or you can use one of the many online tools that rate charities based on this research. A few popular sources are guidestar.org, charitynavigator.org, and charitywatch.org.

Don’t forget to consult with your financial planner about the amount you plan to donate and the most effective giving method. I enjoy supporting my clients’ generosity and empowering them to donate, but part of this process is considering the impact gifts will have on other financial goals. By discussing the various giving methods, we can often help increase tax savings, which can allow you to donate even more. For more information on charitable giving tax strategies, refer to this article. To learn more about our process for incorporating your charitable goals into your overall financial plan, read our downloadable Guide to Living Fully in Retirement.

As you research, volunteer, have meetings, and write checks, don’t forget to reflect on the enjoyment of giving. It is a privilege to be in a position to help nonprofits and positively impact others. In fact, studies have shown that philanthropy helps people achieve a greater sense of personal satisfaction and is even closely aligned with living longer. That’s something we can all feel good about!

Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable; however, Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal, or accounting advice, and nothing contained in these materials should be taken as such.

Guilt-Free Spending

by Sarah Kordon | Sep 20, 2022 | Advisors, After you retire, Preparing for Retirement, Risk & Reward, Sarah Kordon, Tech Focus, Wealth Enhancement

Just the thought of setting a budget can be enough to send us running for the hills. The other day, I had lunch with a friend who is a fellow career mom. We often swap stories about our busy lives and commiserate about how hard it can sometimes be to balance work and motherhood. Her career has taken off over the last year, but she looked more relaxed than ever. She shared that she and her partner had decided to outsource many of the household responsibilities they had historically struggled to keep on top of and often bickered over. After telling me what an amazing gamechanger this had been for her mental health and her family, her expression quickly changed to one of guilt as she admitted that the services were costing them quite a bit. Despite her increase in income, she felt embarrassed and irresponsible about how they much they were spending on services some would consider unnecessary. To her it sometimes felt as if they had traded their weekly arguments over household tasks with monthly disagreements over money.

I could relate to her experience on both a personal level and a professional one. After assuring her this was a common struggle, I shared tips with her that have helped many of my clients over the years. The traditional guidance for people grappling with feelings of guilt, self-reproach, or insecurity over their finances is to create a strict budget and stick to it. Some people enjoy a disciplined approach to things, but for many of us, avoiding the need for strict budgets can be a primary driver for saving and working hard. Tracking every small expense, feeling guilty about how much you spent last month, questioning partners on their expenditures, and generally feeling restricted—what’s to like? It’s right up there with counting calories, so I understand why people avoid it altogether.

If you’re like many high-income earners and people who have saved well, you might feel that avoiding the need to budget is a right you have earned. After all, you’ve worked hard so you don’t have to count every penny, right? The trouble is that it puts you at risk for not meeting larger goals such as a comfortable retirement, paying down debt, college funding, or making a large purchase; and it can also leave you feeling out of control and dissatisfied. Whether you are a busy professional struggling to figure out why you don’t have more money at the end of every month or you are already retired and unsure how to balance your personal spending with other goals, there is a strategy that can help you feel more in control of your money without having to budget.

Pre-Retirement Reverse Budgeting Process:

By taking these steps, you ensure your savings goals are met first, and anything that remains can be spent on whatever you desire, without guilt!

Identify your goals.
Determine how much you need to save on a periodic basis to meet these goals—the easiest way to do this is to work with your financial advisor to create a financial plan.
Set up an automatic savings plan with a combination of payroll deductions and automatic monthly transfers.
Enjoy the freedom to spend what is left as you choose and the peace of mind that comes with knowing you are able to meet your goals!

To make this process work for you, it’s important to start with a cushion in your checking account and to review your checking account at least monthly and before making large purchases to ensure you are maintaining a sufficient balance. If you find yourself running short, you can pull back slightly on small discretionary purchases and build that cushion back up so you aren’t forced to dip into your savings for something other than the goals you have set. We all tend to spend more when we are feeling flush, so checking your bank balance periodically should allow you to reign in non-essential expenses for short periods and return to guilt-free spending in no time. If you find a significant gap, you may need to examine recurring expenses for areas to cut back or reassess your savings goals.

Retirement Goal Funding Process:

You worked hard, you saved, and now you are living the retirement dream, but that doesn’t mean you’ve accomplished all your financial goals. Many people in retirement want to leave a certain amount to charity, help their children buy a home or start a business, help their grandkids with college, save for a large purchase such as a second home, or plan ahead for long-term care expenses. When you have a set amount of assets that need to provide for a lifetime of expenses and several other large goals, it can be hard to determine whether you have enough and what you can afford.

It’s also common for retired people to struggle with the transition from saving to spending. If you have been a disciplined saver and enjoyed watching your nest egg grow, the idea of diminishing it can be incredibly stressful. This process has helped many of my clients discover a new sense of financial comfort and freedom.

Identify your goals. What do you anticipate for recurring annual spending? Do you have any legacy goals, plans for long-term care, or larger purchases, gifts, and donations to consider?
Work with your financial advisor to run financial projections that account for investment returns, market volatility, inflation, taxes, etc.
If the projections show you are not able to attain every goal, work through prioritizing and adjusting your goals until your projections show results you are confident in.
The end result should provide you with an annual amount you can confidently spend while giving you peace of mind that you are able to meet your other goals as well!

One final, crucial step in the financial planning process is to meet with your advisor periodically to make sure you stay on track to meet your goals and discuss how goals may change for you over time. A great advisor will review your entire financial picture to make your money work its hardest for you and not only maximize your potential for meeting those goals but also encourage you to reach for the stars and live fully along the way. If you’re not already working with an advisor or are looking for someone who can provide this type of comprehensive support, we’re happy to help—schedule a consultation now!

Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be taken as such.

Why Cash Isn’t Always The Best Donation

by Sarah Kordon | Nov 16, 2021 | Charitable Giving, Sarah Kordon, Tech Focus, Wealth Preservation, Wealth Transfer

Whether it’s your time, money or a box of things from your garage – giving feels good. Donating cash or writing a check to your favorite charity is an amazing way to give back. It’s also fairly easy and the most obvious method for charitable donations, but it may not be the best strategy. So, before you reach for your check book, make sure you understand your options.

One of the problems with donating cash at the bank is that for many people, there’s no Federal tax advantage. That’s because the IRS doubled the standard tax deduction in 2018 and limited certain deductions we used to be able to itemize. Depending on how you file and how old you are, the 2021 deduction is now between $12,550 for a single filer under age 65 and $27,800 for joint filers over the age of 65. Therefore, if all your allowable deductions (including your charitable contribution) are less than this amount in a given tax year, you will not save any money in federal taxes by giving cash. In 2021, there is one exception to this that allows single filers to deduct up to $300 in charitable donations and joint filers to deduct up to $600, while taking the standard deduction.

The good news is, there are some options that can save you on taxes and allow you to direct more dollars to the non-profit close to your heart.

Qualified Charitable Distribution (QCD)

Once you reach age 72, you will be required to start distributing a certain percentage from your pre-tax retirement accounts, such as IRAs and 401(k) plans. These required distributions are taxable as ordinary income, unless they are given directly to a charity as a Qualified Charitable Distribution (QCD). This is an excellent strategy for many people, even when giving smaller amounts. By giving directly from your IRA, you eliminate taxes on the amount given (up to $100,000 annually) regardless of whether you itemize or take the standard deduction. Unlike other charitable deductions, QCDs also reduce your Adjusted Gross Income (AGI). This is important because your AGI is a factor in many other tax calculations, so reducing it can also reduce your Social Security taxes and Medicare premiums, increase your medical expense deductions, and help you qualify for certain tax credits.

To highlight the effectiveness of this strategy, here is an example of a couple who wants to donate $10,000

Clustering Contributions

If you tend to give every year and your itemized deductions are close to the standard deduction amount, clustering your contributions can be very beneficial. For example, if you give $20,000 every year you might instead give $40,000 this year and nothing the following year. This would allow you to itemize in the year you donated $40,000 and take the standard deduction the following year. Even if you itemize, if your itemizations don’t exceed the standard deduction by the amount of your charitable contributions, clustering your contributions can increase your total deductions over a multiple year period. This strategy is particularly useful if you have unusually high income one year from the sale property, a business sale, a large bonus or vesting employee stock. If you are able to cluster your contributions using a cash donation, this year may be particularly beneficial for some people since the IRS has waived the usual 50% of income deduction limitation for 2021.

Donor Advised Fund

Many people want to take advantage of the clustering strategy, but feel an obligation to give to a certain organization every year, don’t want to give it all away at one time, or are not ready to decide which charities to donate to. In this case, using a Donor Advised Fund may be appropriate. These funds allow you to cluster several years of contributions for an immediate tax deduction and then to donate them over time. Until the funds are donated, they can be invested and grown tax deferred.

IRA Designated Funds

While the IRS does not allow QCDs from IRA accounts to Donor Advised Funds, you are permitted to make a QCD to a Designated Funds. Unlike Donor Advised Funds, Designated Funds have predetermined charitable beneficiaries, so they do not give you the flexibility to determine the organizations at a later date. They do offer an immediate tax deduction and allow for flexibility on the timing the organization receives the funds.

Donating Appreciated Assets

For anyone who owns appreciated assets outside of qualified retirement accounts, donating these assets without selling them first can be a great strategy. It’s particularly useful for people that have a highly concentrated stock positions and want to reduce their risk by selling some of the stock. I think seeing a simple example highlights the tax benefits best.

An Oregon couple purchases stock for $10,000. Years later the stock is worth $50,000.
If sold, they would have a $40,000 taxable gain. The couple has $200,000 of other taxable income, so they would owe 15% in Federal long-term capital gains taxes, 3.8% in Net Investment Income tax and 9.9% state income tax – totaling $11,480 in taxes. This reduces their donation and possible deduction to $38,520.
If they instead donate the stock directly, they avoid the federal and state taxes on the sale, the charity receives a larger donation, and they receive a larger deduction.

Estate Planning

You can also incorporate charitable giving into your estate plan by naming a charity as a beneficiary on an investment account or in your trust or will. This is often utilized by people who want to leave a legacy behind. Since you receive a tax deduction on your estate taxes, this is a particularly good strategy for people who have a taxable estate and want to have access to funds during their lifetime.

When incorporating charitable giving into your estate plan, it’s important to consider how assets are taxed depending on who they are left to. For example: an IRA that is left to individuals will be taxable as ordinary income to your heirs, non-retirement accounts may receive a step-up in cost basis (basically forgiving the tax on investment gains) and Roth IRAs are passed tax-free. It’s therefore advisable to leave IRAs to charity and leave your non-retirement accounts and Roths to your friends and family.

State Programs

For my fellow Oregonians, The Oregon Cultural Trust is an underutilized resource that can allow you to double your impact when donating to one of 1,400 different Oregon non-profits. You can see which organizations qualify on their website: www.culturaltrust.org. By making a matching donation of up to $500 per person you will effectively have your match refunded to you in the form of a tax credit, which reduces your tax due dollar for dollar. The matched amount is then granted to cultural nonprofits across Oregon. Residents of other states may have access to similar programs.

Charitable Gift Annuity

For people who need additional income a charitable gift annuity can be a good option to consider. In exchange for the donation, the charity provides an income stream for your life, or some other set period of time, and you receive an immediate partial tax deduction.

Charitable Trusts

If you have significant assets that you would like to donate during your lifetime, you might also want to consider a charitable trust or a foundation.

Charitable trusts are irrevocable, so once assets are put into the trust you cannot use them for any reason not specifically outlined in the trust. The benefit is that you are able to donate appreciated property, receive an immediate tax deduction, and avoid capital gains on the sale. There are two main types. A Charitable Remainder Trust provides income to the charitable donor for life or some other specified period and at the end of the period the remaining assets go to the designated charity. A Charitable Lead Trust is the opposite. Income goes to the charity for a specified period and the remaining assets revert back to the donor or another named beneficiary. You will need an attorney to draw up the trust and having a professional trustee is often recommended, so this is best for more complex assets and larger donations. If this sounds appropriate for you, you may need to act fast. There is a tax proposal to tax the gains for the non-charitable portion of the trust, notably reducing the tax benefit of this type of donation.

Foundations

A family foundation or private foundation can be appropriate for individuals who would like their charitable work to continue long after they are gone, by passing the torch to future generations. The donated funds are invested tax-deferred. Unlike other options you have the ability to hire staff, including your own family, to operate the foundation. Foundations are highly regulated and can be expensive to administer, so they are usually only pursued by families with significant assets.

Not all of these strategies will be appropriate for everyone and what makes sense for you one year may not be best the following year, so it’s important to work with your professional team on an ongoing basis. Talk with your financial planner about how this fits into your overall financial plan, to ensure you are balancing your generosity with your ability to achieve your other financial goals. Your planner can also help you narrow down your options, coordinate with your accountant and estate planning attorney, and consider options for taking advantage of higher deductions, such as Roth conversions or realizing investment gains in a lower tax bracket. If you are not currently working with a financial planner, you can learn about the advisors at Merriman at www.merriman.com/advisors.

You can download a PDF of this article here.

Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax or legal or accounting advice, and nothing contained in these materials should be taken as such. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. As always please remember investing involves risk and possible loss of principal capital and past performance does not guarantee future returns; please seek advice from a licensed professional.

Advisory services are only offered to clients or prospective clients where Merriman and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Merriman unless a client service agreement is in place.

What Women Need to Know When Working With a Financial Advisor | 5 Tips

by Sarah Kordon | Feb 16, 2021 | Advisors, Sarah Kordon, Tech Focus, Why Merriman, Your Professional Team

I want to acknowledge that all women are wonderfully unique individuals and therefore these tips will not be applicable to all of us equally and may be very helpful to some men and nonbinary individuals. This is written in an effort to support women, not to exclude, generalize, or stereotype any group.

I was recently reminded of a troubling statistic: Two-thirds of women do not trust their advisors. Having worked in the financial services industry for nearly two decades, this is unfortunately not surprising to me. But it is troubling, largely because it’s so preventable.

Whether you have a long-standing relationship with an advisor, are just starting to consider working with a financial planner, or are considering making a change, there are some simple tips all women should be aware of to improve this relationship and strengthen their financial futures.

Tip #1 – Work with an Advisor You Like

You may think this is obvious or that this shouldn’t matter. Unfortunately, it isn’t obvious to many people, and I would argue that it may be the most important factor. If you don’t like someone, you are unlikely to trust them; and if you don’t trust them, you are unlikely to take their advice, even when it’s advice you should be taking. You’re also more likely to cut your meetings short or avoid them altogether. Chatting with my clients is one of my favorite parts of my job, and it’s also when I usually find out about the important changes in their life that they might not even realize impact their financial plan. It’s an advisor’s job to identify the financial impacts of your life changes, and your advisor can’t help if they are not aware of the changes. The better your relationship with your advisor, the more likely you will keep them updated—and the more likely they can help you make smart financial decisions.

Take some time to consider what’s most important to you when building a trusting relationship, and don’t be afraid to ask an advisor about their personality traits or communication style. You may need someone who is approachable and compassionate, or it may be more important to you that they are straightforward and detailed. I’ve worked with enough advisors to know we come in every shape and size you can imagine, so don’t settle for someone who isn’t a good fit.

This chart can be an extremely helpful tool for identifying your preferred communication style(s). Once you’ve identified your preferred style, you should be able to easily tell whether your advisor is communicating effectively according to your personality. If they aren’t, send them the chart! Strong communication skills are essential in financial planning, so they should be able to adapt to fit your preferences.

Aside from communication style, it may be important to you that you work with an advisor who shares certain values that you hold dear. I recently met with some new clients who I could tell were not completely at ease even though I thought we had hit it off. They were squirming in their seats when they finally got up the courage to ask me about my political leanings. When they learned that we felt the same way, they were visibly relieved. It was important enough to them that I don’t think they could have had a trusting relationship without this information. If you feel this strongly about anything, ask about it when interviewing advisors.

If you find you are having a hard time getting to know your advisor, ask to go to lunch. Once you get away from the office and their financial charts, it will likely be easier to build a connection. You may even get a free lunch out of it!

Tip #2 – Tell Them What You Want

Studies have shown that women tend to be more goal-oriented than men. I have found it to be true that women are more likely to focus on goals like maintaining a certain lifestyle in retirement, sending children to college, or making sure the family is protected in the event of an emergency, while others may focus more on measuring investment performance.

At Merriman, we believe all investing and financial planning should be goal-oriented (hence our tagline: Invest Wisely, Live Fully), but many advisors still set goals that focus on earning a certain percentage each year. This can be especially difficult if your partner focuses on this type of measurement as well. Women (or any goal-oriented investor) can sometimes feel outnumbered or unsure of how to direct the conversation back to the bigger picture. You made 5%, but what does this mean for your financial plan? Can you still retire next year? The issue is not that you don’t understand performance or lack interest in market movements, whether or not this is true. The issue is that the conversation needs to be refocused on the things that matter to you. All of the truly excellent financial planners I have worked with have known this and do their best to help clients identify their goals, create a plan for obtaining them, and then track their progress. If you’re not experiencing this, it’s either time to look for a new advisor or to speak up and tell them what you want. Also, note that speaking up is more easily done when you work with an advisor you like (see tip #1).

Tip #3 – Know the Difference Between Risk Aware & Risk Averse

Countless studies have shown that women are not necessarily as risk averse as they were once thought to be. As a group, we just tend to be more risk aware than men are. Why does this matter? First of all, I think it’s important to be risk aware. If you aren’t aware of the risk, you can’t possibly make informed decisions. But by not understanding the difference, women sometimes incorrectly identify as conservative investors and then invest inappropriately for their goals and risk tolerance. Since most advisors are well-practiced in helping people identify their risk tolerance, this is an important conversation to have with your advisor. During these conversations, risk-aware people can sometimes focus on temporary monetary loss and lose sight of the other type of risk: not meeting goals. If you complete a simple risk-tolerance questionnaire (there are many versions available online), women may be more likely to answer questions conservatively simply because they are focusing on the potential downside. Here is an example of a common question:

The chart below shows the greatest 1-year loss and the highest 1-year gain on 3 different hypothetical investments of $10,000. Given the potential gain or loss in any 1 year, I would invest my money in …

Source: Vanguard

A risk-aware, goal-oriented person is much more likely to select A because the question is not in terms they relate to. It focuses on the loss (and gain) in a 1-year period without providing any information about the performance over the period of time aligned with their goal or the probability of the investment helping them to achieve their goal. A risk-averse person is going to want to avoid risk no matter the situation. A risk-aware person needs to know that while the B portfolio might have lost $1,020 in a 1-year period, historically it has earned an average of 6% per year, is diversified and generally recovers from losses within 1–3 years, statistically has an 86% probability of outperforming portfolio A in a 10-year period, and is more likely to help them reach their specific goal.

A risk-aware person needs to be able to weigh the pros and cons so when presented with limited information, they are more likely to opt for the conservative choice. Know this about yourself and ask for more information before making a decision based on limiting risk.

Tip #4 – Ask Questions

Studies have shown that women tend to be more realistic about their own skill level. It’s not necessarily that we lack confidence—more that we lack overconfidence. I think that’s a good thing; however, it means women lacking financial expertise are more likely to feel self-conscious about asking a question that could be perceived as foolish. This can be particularly hard if there is a third party present (such as a spouse) who has a greater understanding, likes to use the lingo, and/or tends to monopolize the conversation. If necessary, don’t be shy about asking for a one-on-one meeting with your advisor so you have a chance to ask all the questions you want without someone interrupting you or changing the subject.

I would always prefer that someone ask questions rather than misunderstand, and it can be difficult to gauge a client’s level of understanding if they don’t ask questions. I have many highly-educated clients who have never had any interest in investing or financial planning, so it just isn’t their strong suit. There is nothing to be embarrassed about. I promise that an experienced advisor has heard any basic question you might ask a thousand times before. If an advisor is unhelpful or condescending when you ask a question, you should not be working with that person. There are plenty of advisors out there who are eager to share what they know with you. Sometimes the hard part can be getting us to stop talking once you’ve asked! And of course, being comfortable enough to ask questions is always easier if you like the person you are working with (see tip #1).

Tip #5 – Go to the Meetings

I haven’t seen any studies on whether or not women attend fewer meetings. However, if two-thirds of women don’t trust their advisors, I have to believe they aren’t eager to sit in a room with someone they don’t trust for an hour. I sometimes hear that one spouse “just isn’t interested in finances” so they don’t attend meetings. It’s perfectly fine to not be interested. My spouse isn’t! One thing I always find fascinating about working with couples is seeing all the different ways we decide to divide and conquer household tasks. Those lines are often logically drawn based on who has the most interest or the most time. However, even if you completely trust your spouse to handle the finances and you don’t have any interest, it’s important that you are part of the big picture conversations. You may not have any opinion on whether you invest in mutual fund XYZ, but you may have goals that aren’t even on your spouse’s radar or strong opinions about whether your entire portfolio is invested conservatively or aggressively. I find that when one spouse “just isn’t interested in finances,” it means that they attended meetings with other advisors in the past where the conversation wasn’t properly framed to address their goals, or they felt uncomfortable asking questions.

In addition to making sure your financial plan properly addresses your goals and takes your comfort level into account, it’s also important to build a relationship with your advisor so that if you do have questions, if you separate from your spouse, or if they pass away, you have someone you trust to turn to for help.

You may notice that all five of these tips are easier to follow when you follow tip #1—work with an advisor you like. There are many different considerations when hiring an advisor: Are they a fiduciary? Do they practice comprehensive planning? How are they compensated? What is their investment philosophy? They may check off all your other boxes, but if you don’t like them, you are unlikely to get all you need out of the relationship. If you’re looking for an advisor you’re compatible with, consider perusing our advisor bios.

Disclosure: The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be relied upon as such.

What Women Need to Know About Working with Financial Advisors | Tip #5

by Sarah Kordon | Jan 12, 2021 | Advisors, Sarah Kordon, Tech Focus, Wealth Enhancement, Your Professional Team

I want to acknowledge that all women are wonderfully unique individuals and therefore these tips will not be applicable to all of us equally and may be very helpful to some men and nonbinary individuals. This is written in an effort to support women, not to exclude, generalize, or stereotype any group.

I was recently reminded of a troubling statistic: Two-thirds of women do not trust their advisors. Having worked in the financial services industry for nearly two decades, this is unfortunately not surprising to me. But it is troubling, largely because it’s so preventable.

Whether you have a long-standing relationship with an advisor, are just starting to consider working with a financial planner, or are considering making a change, there are some simple tips all women should be aware of to improve this relationship and strengthen their financial futures.

Tip #5 – Go to the Meetings

I haven’t seen any studies on whether or not women attend fewer meetings. However, if two-thirds of women don’t trust their advisors, I have to believe they aren’t eager to sit in a room with someone they don’t trust for an hour. I sometimes hear that one spouse “just isn’t interested in finances” so they don’t attend meetings. It’s perfectly fine to not be interested. My spouse isn’t! One thing I always find fascinating about working with couples is seeing all the different ways we decide to divide and conquer household tasks. Those lines are often logically drawn based on who has the most interest or the most time. However, even if you completely trust your spouse to handle the finances and you don’t have any interest, it’s important that you are part of the big picture conversations. You may not have any opinion on whether you invest in mutual fund XYZ, but you may have goals that aren’t even on your spouse’s radar or strong opinions about whether your entire portfolio is invested conservatively or aggressively. I find that when one spouse “just isn’t interested in finances,” it means that they attended meetings with other advisors in the past where the conversation wasn’t properly framed to address their goals, or they felt uncomfortable asking questions.

In addition to making sure your financial plan properly addresses your goals and takes your comfort level into account, it’s also important to build a relationship with your advisor so that if you do have questions, if you separate from your spouse, or if they pass away, you have someone you trust to turn to for help.

Be sure to read our previous blog posts for additional tips to help women get the most out of working with a financial advisor. You may notice that all five of these tips are easier to follow when you follow tip #1—work with an advisor you like. There are many different considerations when hiring an advisor: Are they a fiduciary? Do they practice comprehensive planning? How are they compensated? What is their investment philosophy? They may check off all your other boxes, but if you don’t like them, you are unlikely to get all you need out of the relationship. If you’re looking for an advisor you’re compatible with, consider perusing our advisor bios.

Disclosure: The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be relied upon as such.