Meeting with your financial advisor?

Here are some key decisions to make before you do.

The financial industry and wealth advisors are always looking for that competitive edge that will gain your attention, trust and assets. Many now claim to be interested in your life and lifestyle, even professing to augment their financial advice with life advice. I read one brochure that defined their work as “wealth and life builders.” But when I explored their web site, it was difficult to locate anyone on their staff with expertise on the life side, and their products and approach were purely financial. This is a pity, because they really do belong together.

Because financial advisors’ expertise is only with managing money, it is incumbent upon you to do your homework prior to meeting with them. Before you plunk down your hard earned assets, you need to think and talk through a number of issues. The more care you take at the front end, the better the impact on the quality of your life and on those around you. Essential to this task is bringing your financial interests into contact with the broader concerns you have about life, your beliefs, values, and vision of who you want to become.

Here are a few of the many items we recommend that you sort out first. Remember, to move beyond a shallow discussion, you will need expertise and an outside voice. Find someone who knows the area of life issues well.

1. Do you have a plan to build your human capital alongside your financial capital?

We suggest that you think hard about how you can grow and develop as a person. Set aside some of your funds to support your growth and development. I’m always amazed that people will spend a pile for a first class international plane ticket and exclusive retreats and then become cheap when it involves their own development as a person. Vigilance in this area (prevention) will cost much less than problems later.

2. What will the impact of increased wealth be upon your relationships?

Wealth is not neutral; it will have an impact upon you, and your relationships with your spouse, family, children, friends, and community. Money amplifies issues. The better your relational skills, the more successful you will be in not allowing your wealth to damage important relationships. Do you have appropriate boundaries? Do you communicate well? Do you have a safe, confidential relationship to process the difficult issues that will emerge?

3. Are you parenting in a healthy manner?

Parenting is a challenge for anyone, and wealth only adds to the complexity. Sadly, the phrase “shirtsleeves to shirtsleeves in three generations” is kept alive because this is often what happens in families. And more often than not, the rise and fall of wealthy families is more the result of poorly handled human issues than poor financial management.

How you choose to use your resources with your children will shape them in profound ways. There is a direct link between financial planning and parenting. For example, the tendency to use resources to protect children from challenge, adversity and pain is all too strong. If you hope that your children will become creators of wealth and fully functioning persons rather than mere consumers, they need to be stretched and permitted space to fail. Similarly, the amount left to them in your estate will impact them. How well do you know your children and your family system? Will the inheritance be a good thing? Will it damage them?

4. What is the purpose of money?

What is your end game? Is it just social status? Success? A way of keeping score? As important as growing your money is, how much do you need and what kind of life will you want to have? Some think that no debt, $2 million in investments, along with a house and car are adequate. The rest should be used for philanthropic causes. What is your philosophy? An old friend used to ask the reverse question: How much do I get to keep? What do you need to live a meaningful, purposeful life?

5. Do you have a larger view of capital than just financial capital?

Is money how you keep score, or are you also keeping track of your human, social, spiritual, intellectual capital? How are you developing the various forms of capital in your family? In your business? Money isn’t everything. You will find that happiness and security are more closely tied to factors beyond your finances. It’s still true that money can’t buy love.

6. What will you work at?

Work has become a bad word in our society, in part because many of us are doing things that don’t tap into our innate capacity. Do you have something that captures your interest, allows you to engage and explore your capacity? We all need to continue to develop our human capital—we need something to strain against, otherwise we can become idle and bored. The challenge with increased financial capital is that we can remove the opportunity for growth and development from the lives of those close to us and without realizing it and do damage to ourselves.

7. Are your values and beliefs becoming more coherent and defined?

Your beliefs and values will shape how you think about and use your resources. We all have beliefs and values that we talk about and think we live out and another set that we actually practice in everyday life. Authenticity is when the implicit (what we think our values are) aligns with the explicit (how we really live). Sorting these out with a person outside of your normal relationships will allow you to continue to grow into the person you want to become.

Wealth amplifies everything. As you pursue your big orange number or walk the green line, remember that the more carefully you have developed the human capital around you and implemented supporting systems and processes, the more it will lessen the negative impacts and increase the positive effects of wealth upon yourself and those you love. Think of building wealth and a good life in tandem: one supports the other.

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