Credit: What a lot of people don't understand about financial advisors is that they are not there solely to plan your future. They are at your side when a present-day catastrophe strikes.
Everyone faces a serious, non-voluntary life-changing event at least once. It could be the death of a spouse, a layoff, a divorce or a very serious illness, something that is often very emotional and not in a good way. Some people may call their parents for support, and others may contact close friends. After those phone calls are made - who next? A financial advisor.
People who are hard hit emotionally may not be able to consider all aspects and nuances of their situation. They need someone to help them understand how those changes affect their financial pictures before they are able to devise a plan to mitigate the harm. An advisor is that someone.
I've had clients contact me when hard times came upon them. Although I am not a therapist, I was able to really help my clients look at the event without all of the emotion that clouds their judgment and create an action plan to help them survive.
One of my clients, a young married woman with two small children, called me after she was diagnosed with an aggressive cancer that was spreading. She was afraid that the life insurance company would cancel her policy.
I assured her that the policy was still effective because she paid the premiums. The life insurance policy would still protect her kids. I also asked delicately about estate plans. If things did not go well, everything was in place. The reassurance that all financial pieces were set gave her peace of mind. Fortunately, she survived and is doing well.
During the Great Recession, a number of clients called me in distress. They lost their jobs, worrying about paying monthly expenses. Some wanted to tap into their retirement accounts to help them with the financial shortfalls.
I explained the tax ramifications of taking distributions early and how they might be able to make up for their savings losses once they were employed again. I discussed with them how to create a budget. I also asked them about the health and life insurance that might be gone along with their jobs and how to replace these benefits.
An advisor not only helps you make sound financial decisions at times of emotions but prepares you for the catastrophes before they hit. Nobody can plan for every single permutation of events that can occur. But it is much easier to tailor a plan if you have savings or life insurance to cover your back.
Financial worries add to one's distress during major life changes. Call your financial advisor who will listen to your problems, provides guidance on your decisions and makes plans to keep you covered.
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Wendy Spencer, CFP, CDFA, is president of Spencer Capital Strategies Inc., an independent Money Concepts contractor in Arvada, Colo. She is also a family law mediator; her divorce website iswww.divorcemoneypro.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
