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Translation, please

I just spent a wonderful week skiing with our two kids.  (Well, they were skiing and I was attempting to keep up without breaking a leg … but that’s another story.) Chatting with skiers on the lift, I heard a different language. That got me to thinking about the language financial advisors use, why we use it and how it can often be less than useful.

First, some examples:

It puked all night, but today’s a bluebird. It snowed hard last night, but today the sun is shining.

Gnar pow. There’s great, powdery snow on the slopes.

Catch the screaming starfish? Did you see the novice skier doing cartwheels down the mountain, out of control, yelling for help?

I destroyed it. I went down the run so fast, with so many incredible turns, that there’s no snow left for anyone else.

He’s poopin’. He is skiing down the slope, in a crouched position, sitting back on his skies.

My immediate reaction: Not only are these masters of ski language totally cool, but they must be great skiers to speak that way … which, on second thought, may not have been true.

Like many professionals, financial advisors have our own vocabulary. It can be confusing: beta, standard deviation, equity exposure, risk-adjusted return, RMD, TIPS, ETFs, VAs, etc.

Often we use the lingo without thinking. But some advisors use “advisor-speak” to avoid explaining something or, worse, to look smart. My suggestion: when you hear lingo you don’t understand, interrupt and ask for clarification. A good advisor should be able to explain it and put it in context. If you’re not satisfied, ask again.

Not understanding what your advisor is saying – and doing – is just as dangerous as following your kids down a really difficult, steep  run, just because they said there’s gnar pow.

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