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  • Writer's pictureDavid H. Kinder, RFC®, ChFC®, CLU®

Are you intimidated by financial advisors and their fancy terminology?

Updated: Jan 18, 2023

You may find this hard to believe, but some people are AFRAID of their finances AND of financial advisors! In fact, the very people who really NEED our help... are the ones who don't engage with us.

Why? There are a few reasons.

1. No one wants to be made to feel foolish or incompetent. Could you believe that there are financial advisors who use complex terminology ON PURPOSE... to "show off" how smart they are?

This video is a gross over-generalization of what it can feel like for clients who meet with advisors who are trying to "show off" rather than to establish true communication.

2. They may feel embarrassed about their current situation. An article in Financial Advisor magazine for financial professionals stated these statistics:

Out of 2,000 people surveyed:

- 71% of the 2,000 people surveyed said some aspect of dealing with a financial advisor makes them afraid.

- 49% say it is a fear of having to pay the advisor a lot of money.

- 38% say they fear getting bad news about their finances if they talk to an advisor.

- 47% say they are hesitant to trust a financial advisor with their personal financial information.

- 41% feel that a financial advisor would not be able to help them with their finances.

High income doesn't cure the fear either.

- 44% of those earning $100,000+ a year are also afraid the conversation with a financial professional will also cost them a lot of money.

(Isn't that like avoiding the doctor because you're afraid the doctor would tell you if you have cancer? The longer you wait, the fewer options you have. But I digress.)

3. They had a poor experience before. I hate to stereotype this, but it's especially true for women. If women sat with their spouses with a financial advisor... and let's just assume for this example that this woman isn't "financially astute"... it's often the case that the advisor then focuses on the spouse that DOES show more "financial literacy" and they just keep talking over the other spouse's head.

Here's the problem: The spouse that "gets it" turns to the spouse that doesn't and asks "What do you think?" and that spouse, who felt left out and intimidated by the conversation would say "I don't know" (afraid to make another bad choice in front of her spouse) while the spouse says "I like him!" and proceed to summarize why what he talked about (in Greek) was so great.

This dynamic happens in almost all couples. There is usually a spouse that seems to be more astute and one that isn't. The successful advisor communicates well with both.

I've heard it said that "The best advisors write and speak at a sixth grade level, because at that level, even the college professors can understand them."

Leonardo da Vinci said "Simplicity is the ultimate sophistication." Albert Einstein said "If you can't explain it to a six year old, you don't understand it yourself."

If you would like to abandon or translate the jargon and "de-mystify" financial planning topics... contact me.

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