Let Me Clarify
Apples and Oranges

According to the old MasterCard commercials, there are many priceless moments out there that money can’t buy. Although it’s a bit of a cliché at this point, there are still a few items in financial planning that I would say you still can’t put a price on.

Let me clarify.

With fees continuing to be a hot topic, advisors and planners are continuously being asked to demonstrate their value; ultimately justifying the fees that they charge. Don’t get me wrong, fees are extremely important and you should always know what you are paying, but in my experience, sometimes individuals are comparing apples to oranges. There are certain areas that you just can’t put a dollar value on. Two of these concepts in particular are distinguishing the difference between expectations with products vs. services.

What’s love got to do with it?

As I mentioned, there are always going to be items that you can’t put a price on. I won’t waste your time with an exhausting list of all the financial planning items, but a perfect example would be estate planning. (If you want to learn more about estate planning in general, check out our recent Insights article. We are not attorneys, but a huge piece of financial planning surrounds wills, trusts, advanced directives, and taking care of your loved ones. While there certainly is a price for hourly attorney fees and legal documents, I’ve never met anyone that could place a dollar amount on taking the weight off of loved one’s shoulders or knowing who would take care of your minor child, if something should happen to you prematurely. Remember: the state may not always have the same intentions that you do.

Products vs. Services

The priceless emotional benefit of an appropriate estate plan within your financial roadmap is a perfect transition into reminding ourselves that “value” shouldn’t be approached purely by the investment returns that you see on your statement. It sounds pretty straightforward, but you might be surprised by the amount of times I’ve heard “if my fee is X%, then my returns should be X% higher.” While I do believe advisors can potentially add investment value (whether that’s from the specific funds they choose, asset allocation construction, reminding clients to think rationally during volatility, etc.), don’t forget your relationship is based on the services they provide that may not show up in your account value.

I’m sure we’ve all paid for a car wash or a doctor visit or for great service at a fancy anniversary dinner. Again, the value of these services did not add to your bank account, but rather added to your peace of mind or even experiences that you’ll never forget. Don’t get me wrong, financial planning should always focus on financial outcomes, but they are achieved through the services that you experience.

Thankfully, financial planning has come a long way! And as I’ve mentioned in a few other posts now, I encourage you (whether you already work with someone or are considering it) to gather as much information as you can. Obviously, at the top of that list should be what you’re paying. But, before you blindly follow the lowest fee on paper, be sure to understand the depth of invaluable services you should be receiving; instead of getting fixated on investment returns and what you might expect from simply being sold products.

As we embark on this clarifying journey together, I encourage you to submit any ideas, topics, or questions to info@clarifywealth.com. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendation for any individual. “Let Me Clarify” is a weekly blog containing Chad Baxter’s insights and thoughts about a variety of topics. To learn more about Chad, click here


All performance referenced is historical and no guarantee of future results. All investing involves risk including loss of principal. No strategy assures success or protects against loss. This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation. Clarify Wealth Management and LPL Financial do not provide legal advice or services. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.