Every January the same list comes out. Lose the weight. Read more. Spend less. Call your mother more often. By the middle of February most of that list is quietly gone.
Nobody who wrote it was lying. They meant every word. But a resolution without a plan behind it is just a wish with a date attached. Ish is a wish.
So I want to suggest a different kind of resolution for the year ahead. Not one more thing to try harder at. One decision that makes a lot of other things easier. Resolve to find the right kind of financial advice.
I do not mean more advice. There is no shortage of that. Every channel, every app, and every brother-in-law at the holiday table has a view on where the market goes next. I mean advice built on the two things that actually decide how most families do with their money: the plan, and the behavior that carries it out.
What Actually Drives Results
Most of the language in my industry is about the investments. Alpha. Beta. Sharpe ratios. Which fund beat its benchmark last year. Those things are real. They are just not where most of the outcome comes from.
Morningstar has studied this for years in its Mind the Gap research. The pattern is consistent. The average investor earns meaningfully less than the very funds they own, simply because of when they buy and when they sell. The funds did their job. The timing did the damage.
That gap is not a market problem. It is a behavior problem. And behavior is the one variable a good advisor can actually help you manage.
Three Questions Worth Asking
If you already work with someone, these make a fair check-up. If you are looking, they are a good place to start.
Does your advisor start with your life or with a product? Good planning begins with what you are trying to do. When do you want to stop working? What are you retiring to, not just from? Who do you want to help along the way? The investments come after those answers, not before. If your first meeting was mostly about funds and returns, the order was backward.
Does your advisor tell you what the market is going to do? Nobody knows. Not me, not the person on television, not the newsletter in your inbox. A prediction is a guess dressed up as expertise. A plan says something more useful: here is what you will need, here is when you will need it, and here is how we make sure it is there regardless of what the market does in any given year.
Does your advisor talk about you? About how you react when things fall apart, and just as important, how you react when things are going great. People are hardest to coach at both extremes. In a crash the instinct is to run for the exit. In a boom the instinct is to chase whatever is hottest and pile in. Concentration can make you rich. It will most likely not keep you rich. A good advisor knows your tendencies and has a plan for both moods before either one shows up.
Boring on Purpose
Here is the part that surprises people. Good planning is supposed to feel a little dull. Own a broad group of great businesses. Hold them through good years and hard ones. Set aside money with a specific job for the near-term needs, so the long-term money never has to be sold at a bad moment. Revisit the plan when life changes, not when the headlines change.
None of that makes for an exciting story at a party. All of it is designed to hold up across decades and across generations. Owning productive businesses has historically been one of the most reliable ways to grow purchasing power over long periods, but only for the owner who stays in the seat. The plan is what lets you stay.
If your plan feels boring, that is not a flaw. That's the medicine.
Start Small
You do not have to overhaul everything on January first. You can do anything if you do it in small enough steps. Gather your statements in one place. Write down, in plain words, what you want the next ten years to look like. Then ask the three questions above of whoever is helping you, or of whoever you are thinking about hiring.
The best resolutions are not about trying harder. They are about deciding once and letting good structure carry you when motivation runs out. And motivation always runs out.
If you would like to talk through what that could look like for your family, I am always glad to.
Source: Morningstar, Mind the Gap annual study of investor returns versus fund total returns.
NW Advisory LLC is an independent financial advisory. Past performance is not indicative of future results. This article is for educational purposes only and is not individualized investment advice. No investment strategy can guarantee a profit or protect against loss.