In the 1999 comedy classic “Office Space,” two management consultants, Bob Slydell and Bob Porter, are hired to make a company, Initech, run more efficiently, mainly by reducing employee head count. In one memorable scene, they grill an anxious employee named Tom: “What would you say you do here?”
Tom tries to explain that he “takes the specs from the customers to the engineers,” but the Bobs just stare back in disbelief.
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“What do you do?” is a fair question for almost any professional, but when it comes to financial advisors, the answers have profound implications for their clients. Here, we’ll start with the practical and move to more personal examples of what a financial advisor does:
— Day-to-day work of a financial advisor.
— How advisors meet client needs.
— What a financial advisor does for people.
Day-to-Day Work of a Financial Advisor
Put in the most practical terms, financial advisors work with clients on their money flow. They want to maximize the amount coming in the door, minimize the amount going back out and grow what’s left over each month so that a client can do all the things they desire in life.
Financial advisors want to spend as much time as possible with their clients. This is why they entered into the industry and also what earns them a living. But, of course, there are many other tasks involved. A typical day for a financial advisor is usually split among the following activities:
— Meeting with clients.
— Managing client expectations.
— Reviewing investments.
— Preparing client accounts for review.
— Following market trends and best practices.
— Networking with other professional advisors.
— Marketing services.
— Keeping current with regulatory bodies.
Beyond the day-to-day routine, though, financial advisors have a broader mission when it comes to serving their clients, particularly as a fiduciary with a duty to put clients’ best interests first.
How Advisors Meet Client Needs
A 2022 eMoney survey revealed consumers want three main things from their financial advisor: advice that isn’t overwhelming (22%), transparency (56%) and personalized service (66%). During my more than 25 years in the financial services profession, I’ve seen those three themes play out time and again. Let’s break them down one at a time:
Advice That Isn’t Overwhelming
Back in 2000, there were around 18.4 million people ages 65 to 74 years old living in the U.S., according to the U.S. Census Bureau. Much like today, that was a common age range for retirement. But for many employees, the journey to retirement, from plan enrollment to income distribution, was littered with complexity and confusion back then.
As a relationship manager for a nonprofit health care retirement plan back in the early 2000s, one of my main responsibilities was to explain how the retirement benefit worked during new-hire orientations and open enrollment periods. The hospital offered a generous 2-for-1 match up to 5% of pay, but employees often found themselves buried in paperwork and unsure how to prioritize their options.
To cut through the confusion, I used to tell employees a story about Jan and Joan, both of whom worked for the same hospital for about 30 years.
Jan enrolled in the retirement plan early at her manager’s suggestion, stayed consistent, and by 68 was still working because she wanted to, not because she had to. Joan never enrolled because she thought she couldn’t afford the contributions and missed out on the matching contributions over three decades. At 65, when Joan called the plan’s customer support team to check on her retirement balance, no balance existed, unfortunately.
Automatic enrollment wasn’t available prior to 2006, but even then, I learned that what employees hear, feel and visualize in a benefits presentation often overshadows what is actually said. So, my team and I created and delivered plan education to employees at each of the hospital’s 14 locations in three states, walking them step-by-step through enrolling in the retirement plan and explaining what their employer match could mean for their financial security over time.
The difference between Jan and Joan illustrated a powerful truth: When financial guidance is clear and approachable, people are far more likely to take action, and ultimately, to thrive in retirement.
Transparency
Real estate ownership is a significant source of income and wealth for many Americans. In fact, of the nearly 50 million rental units in the U.S., more than 70% are owned by individual investors, according to the U.S. Census Bureau.
Yet, when it’s time to sell, taxes can quickly erode profits. That was the dilemma for Diane and Don shortly after they fully retired in 2023 and no longer wanted the responsibilities of property management.
That’s when we explored the potential benefits of a 1031 exchange, which allows accredited real estate investors to defer capital gains by reinvesting proceeds from a sale into a “like-kind” property, such as a Delaware Statutory Trust. In this case, the 1031 exchange into a DST allowed Diane and Don to receive passive income and simplify their estate for their beneficiaries.
On paper, this strategy seems simple. In practice, it’s not. The IRS rules are detailed, timelines are strict, and documentation must be exact. A missed deadline or an improperly handled fund transfer can invalidate an entire exchange.
Transparency in this context wasn’t limited to fees or returns; it was also about making sure the clients understood every moving part of a complex strategy before they implemented it.
Personalization
When Allen, a hospital executive, asked me to manage his joint investment account, he was worried about the heavy tax burden it generated each year. After reviewing the account with his CPA, we developed a tax-efficient plan to unwind certain master limited partnership (MLP) holdings and use carryover losses to offset gains.
In another case, Karen, a health care professional and widowed single woman, asked how retirement two years early would affect her financial future. After analyzing her Social Security options, we discovered that collecting a survivor benefit at age 60 and delaying her own benefit until 66 could add about $63,000 in lifetime income, and even more if she waited until age 70.
The math mattered, but so did the meaning. Every recommendation, from investment strategy to retirement timing, needs to align with an investor’s personal story and objectives, and not be limited to a spreadsheet.
What a Financial Advisor Does for People
At the end of the day, if the two Bobs ever asked me, “What would you say financial advisors do?” I’d tell them this: We guide people through some of the most complex and personal decisions of their lives. We help them find clarity in their finances, confidence in their future, and meaning in their choices. In the end, our job isn’t just about managing money. It’s about helping people live with purpose and peace of mind.
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What Does a Financial Advisor Do? originally appeared on usnews.com
