The financial marketplace is riddled with acronyms and jargon that can make these conversations confusing. Trust me when I say your advisor has to work hard to stay away from using too many acronyms because this is how we communicate with investment companies on a daily basis. It can be challenging at times to make sure we remember not everyone knows this terminology, and to be sure to explain things in layman terms while also meeting regulatory standards to cover all necessary details.
If you are considering purchasing a car or furniture for example, you can touch and see the qualities and features because they are tangible items. Investment planning involves intangibles which makes them harder to be explained and understood.
This isn’t unique to the financial industry. For example, I struggle with computers. When our technology advisor explains our computer issues I admit I can easily become lost. I try to comprehend what he’s saying but it can be a challenge for me to grasp the technical terms and details in a way that makes sense to me. I’m certainly trying my best to understand yet, sometimes I struggle after he has gone to remember accurately what he said.
Just as it’s important for computer experts to realize not everyone is a technical whiz, financial planners also need to recognize that financial topics do not come easy to most.
There is a lot of information to be absorbed by an investor in a typical financial meeting with their advisor. Above and beyond the terminology, it can feel like information overload. Sometimes what makes perfect sense to an investor during a meeting may later become a question that needs revisiting.
Here’s the challenge. Sometimes people feel stupid because they didn’t understand something, or they have forgotten what their advisor said and become afraid to inquire. Please don’t. If you have questions just ask. This is your financial future and it’s important you understand to the level that’s comfortable for you. It’s important for us to know as planners when we need to explain something again.
While you may feel you are inconveniencing your planner by asking, they would rather you ask than have you confused. So yes, if that means asking the same question a few times over, in a few different meetings until it sticks, then yes, please ask. There are no stupid questions.
Sometimes we hear people say, “When we met about this it made perfect sense but now I’m confused about something. Can you explain it to me again?” Absolutely! Nine times out of ten it is simply a refresher that’s needed to put everything back in context of the overall plan.
People want to understand their investments and financial plan but it is not easy to absorb everything all at once. And remember, building this knowledge takes time. Seasoned investors didn’t become that way overnight. It takes several meetings over several years for an investor to really build their knowledge base. Give yourself credit for small milestones along the way and recognize each meeting allows you to understand at a deeper level. But above all don’t stop learning and don’t stop asking. Your financial future will thank you.
Stephanie Farrow, B.A., CFP., Stephanie has over 20 years’ experience in the financial services industry, a diploma in Financial Planning from the Canadian Institute of Financial Planning and a Certified Financial Planner designation. Stephanie has been writing a financial planning column for the local business magazine Elgin This Month since 2010. Stephanie and her husband Ken Farrow own Farrow Financial Services Inc. About our Farrow Financial Team.