“Judge a man by his questions rather than by his answers.” —Voltaire
A Functional Retirement Advisor (FRA) is an advisor that focuses not only on the QUANtitative data but takes a special interest in the QUALitative data as well in order to get you to the retirement you envision for yourself. But, really what is the difference between QUANtitative and QUALitative data and how does knowing both impact your investments?
QUANtitative data is the money. The numbers. Age is a number as well—think quantity, because you can measure how much. Obviously, dollar amounts, return percentages and cash flow needs are all QUANtitative. Most advisors do a good job getting QUANtitative. Think QUANTITY— numbers. It is quantifiable.
To get to the bottom of the why behind your planning we need QUALitative data.
These are the more subjective questions an FRA will ask you. The questions and answers are values-based and depend on the person. QUALitative data gives us a VISION: a reason for doing all the number stuff. Answering what’s important about money to you is QUALitative. Think QUALITY—values.
What is the client’s past investment experience? Did they have a bad experience with an investment advisor? What are your goals that are relevant to you? What are your hopes, fears, and values? What are your expectations? How is your health? Is it QUALitative? Health is qualitative and it is important. Tell me about your family. Tell me about the home you live in. Your work? All QUALitative.
How The FRA Uses the Data
A Functional Retirement Advisor makes sure they not only understand the figures, but they also get to understand your individuality – understand YOU. Most advisors, are very good at handling money and advising on your current and future monetary situation. Most FRAs go the extra mile and put the QUALitative data to use.
It is similar to going to a doctor: Most doctors are good at knowing symptoms and figuring out, with the use of technology, what the actual illness or injury is. However, they should know your QUALitative information too—for example, if you’re an active runner, how often do you exercise, how much water do you drink a day, what kind of food do you eat, what times of day do you eat, how much alcohol do you consume. What kind of supplements do you take, if you take probiotics, are you taking enough vitamin D, what do you want to be doing, what do you feel like, how tired are you, how do you sleep, what stresses you out, if you meditate, whether you walk, how long do you sit per day… etc., etc.
Yes, they are already getting the other quantifiable information, such as medications you are on as well as your past medical records, if you are allergic to anything, your height, weight, blood pressure, and pulse. This is a sound practice and what most doctors are doing. But are they going the extra mile in understanding you as a person with individual circumstances? This extra understanding would help you to get the most optimal health possible. (Note that it does not guarantee optimal health, but may give you the best chance at achieving this).
So, just as you should be putting extra care into selecting a great doctor that goes above and beyond to help you ensure you are as healthy as possible, you should put the same care into selecting an FRA that can help you prepare toward your best retirement.
Joseph F. Falbo, CFP®, AIF®, CRC® is an independent LPL financial advisor that helps grow and preserve clients’ wealth using cutting edge, customized, and comprehensive strategies. With over two decades of experience, Joe helps clients to pursue and retain the lifestyle they want in retirement. To discuss your retirement goals or any financial topic you want, schedule a 20-minute complimentary call. To learn more about Joe, please visit falbowealth.com.
CRC conferred by InFRE®
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.