Communication is key or at least that's what my wife tells me...
So why aren't your professional advisors talking with one another? Everyone has professional advisors in their lives. Whether it be your financial advisor, your lawyer, accountant, group benefits consultant or even a parent or spouse. These advisors are people that you trust to look after areas that you know you aren't going to spend the time to fully learn and be able to do yourself. Because you trust them, in a lot of cases you implement their advise with mostly blind faith, and that's okay, but I'm here to suggest you ask for a little more out of them.
Before you implement any changes your advisor recommends, you should take this step. Have an active list of your professional advisors and send them an email. Tell them about the change you are looking to make and ask them Is this change going to have an impact on any of their existing plans that they already have in place or are planning to have in place for you. Most times, everything will be just fine or they may need to ask that advisor some additional questions. Sometimes, it could have a severe impact and that may need a change of course. Here's an example.
A business owner sets up a group benefit plan for themselves and their staff, on that plan is a disability insurance policy. That business owner has ensured that policy will cover him for most of his earnings in the event that he should be unable to show up to work. He is in his fifties and in the home run stage where he is looking to secure his earnings for retirement, so a disability could be potentially catastrophic. A few years down the road his accountant suggests that the owner switches from a salaried income to drawing dividends. While the accountant had their reasoning for suggesting the change it had a very large and potentially catastrophic impact. Because the business owner switched over to taking 100% dividend income he is now offside with his disability income policy as that policy will not cover dividend income. So for the last few years the business owner has been paying a hefty sum for a disability policy that had virtually no chance of covering his income and neither the accountant or benefits advisor was aware. Luckily,
we were able to catch this before a claim but this could have potentially cost him hundreds of thousands of dollars in lost income. Never mind the thousands he's already lost on a policy that wouldn't pay out.
Luckily, this issue has a very simple and free solution! Introduce your professionals to one another and let them know that it's important to you that they leave the lines of communication open. This way, before a major change is made the two parties have coordinated with one another and ensured it won't have a massive impact on your financial future.
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