Financial Planning Is More Than Managing Money

“What exactly do you do?”

I think about this visual from Michael Kitces whenever someone asks the question.

There are 101 different items on this list. Cash flow. Debt. Insurance. Investments. Taxes. Retirement. Estate planning.

Not everything applies to every client. And not every advisor provides everything. But the last section may be the most important: The Psychology of Financial Planning.

Some of the most valuable things a good advisor does are also the hardest to quantify.

Being an objective sounding board when you're facing a major financial decision. Helping you avoid making an emotional decision at the wrong time. Coordinating with your CPA, attorney, insurance professionals, and other advisors. Connecting the dots across your entire balance sheet. Helping you actually take action on the things you've been putting off for years.

There have been plenty of studies attempting to quantify the value of good financial advice, with some suggesting it can meaningfully exceed the typical advisory fee. The reality, however, is that I think it's impossible to truly quantify.

Real value comes from an advisor or team with command of all the technical aspects, but who you also trust, who knows you, understands your financial life, and helps you quarterback it all.