Be Frugal . . . But Never Cheap!


I am an ol’ Yankee when it comes to saving and spending.  Always have been.  Heck, all my buddies from high school love to joke with me that I still have my First Communion money.  So, I can relate to anyone who classifies themselves as frugal . . . not cheap, but frugal.  

So, why should anyone hire somebody else to help them plan for retirement? Why can’t anyone just manage their finances on their own? Well, it’s a fair question and one that I hear from time to time. Certainly, in the internet age we live in, there’s a seemingly infinite amount of information on how to do just about anything yourself.  Who hasn’t driven by a For Sale-By Owner real estate sign and thought, “Yeah, I could do that. Why would I waste money paying somebody else a commission to sell my house?”

Don’t get me wrong, folks, I’m all for saving money on things I can do myself. I have even on occasion been “that-guy” who tells his wife, “Don’t call a plumber, let me take a look at it first.” Only to walk upstairs ten minutes later with my shirt soaking and exclaim, “OK Jill, why haven’t you called the plumber already?” 

Let me introduce you to my very affluent neighbor; I will call him Gus.  Gus is a good guy.  He in his 70’s, married for almost 50 years to the same woman, June, and together they raised three successful daughters.  Gus retired about 15 years ago after a successful career at IBM in Connecticut.  Gus still mows his own lawn. Gus does not have too.  We were outside on his patio last week having a beer or two when I asked him, “Gus, why are you still mowing your own lawn?”  He chuckled and said, “It’s how I get my exercise. Plus, I am cheap!” 

You know, in the financial world today, there are a multitude of discount online brokerage firms that offer consumers the ability to trade at a supposedly cheaper cost.  For those with the aptitude and time to do the research, they may offer advantages if you’re looking solely for a trading platform.  

So, let’s dive into why anyone would engage the help of a human Financial Advisor?  The answer is two-fold. First, a financial advisor should give you the practical tools and experience you more than likely don’t have or don’t have the time to deploy.  Or, maybe you simply don’t have the all of the necessary resources to build out a sound financial system.  A financial advisor has likely helped hundreds, if not thousands, of people prepare for retirement and has likely seen and worked through a number of financial what-if scenarios that you may not have. An advisor should look at a much broader landscape of components than merely a trading platform. Good advisors are holistic and should work with you to design and deploy a plan that integrates all the components of long-term financial system.  And, of course, the best advisors should be operating as only a true fiduciary.

Beyond helping with your actual investment purchases and sales, a good financial advisor should help to look at the actual targets you want to hit, such as planning for college expenses, anticipating health care costs and creating income for retirement that is measurable and predictable. A financial advisor should also help integrate tax and legacy planning into your system as well. 

And maybe most important of all, a seasoned financial advisor should bring to the table a strategy to capture potential gains when there are gains to be had, as well as, to help protect a lifetime of savings when there aren’t. 

I must tell you, personally, that some of the most gratifying moments in my own practice aren’t when we have had a great year on the upside.  That can be the easy part of my business.  Nope, it’s in situations when the market has taken a nosedive like we saw in March.  The trick there is to implement a down-side risk mitigation system before the nosedive hits, helping to protect them.  In fact, last year’s Advisor Authority study showed that 88% of human financial advisors had some type of strategy in place to help protect their clients’ assets against market risk, while only 65% of investors who built their own financial system had a strategy in place to protect their assets in times of choppy waters.  This has become a pretty important component to a good retirement system lately, think 2001, 2008, and even this year.

A second, and often overlooked benefit that a good financial advisor should offer to bring to the table is “emotional” in nature.  And everyone knows there are few things more emotional than money.  A financial advisor must bring an objective perspective to your finances and to your financial system. Fear and anxiety are  significant risks to anyone’s money. I find, when folks are fearful or anxious, they’re more likely to make a misstep or a bad financial decision that isn’t based on rational thinking. Yup, a good financial advisor should help to mitigate fear and anxiety.  

But you know, in my own personal experience, the bedrock foundation to any good financial relationship is trust.  The trust must be centered around the fact that the client’s interest is always first.  This is true of many good advisors, and it’s been reinforced in a recent study published by Vanguard, “The Value of Advice: Assessing the Role of Emotions.” The study describes the importance of relationships with a human financial advisor. According to the study, “the relationship with a trusted advisor accounts for 72% of perceived value.” In addition, the study elaborates further, “This factor includes clearly emotional attributes such as trust, personal connection, and proactive outreach.”

Look, it’s easy to say I am biased towards having a human financial advisor.  Heck, I have made my career out of it.  The reality is that most folks find the same thing in their own careers. If you reflect on what you do or did for a living, you offer or offered a certain amount of experience and objectivity those outside of your profession typically don’t have and really don’t have time to develop. While I’m certainly proud of the client relationships that my team and I have developed through the years, folks, there are many other good advisors out there. Do some research, interview some people, and find the right fit for you. Usually even the smartest people appreciate an outside perspective!  And remember, always be frugal . . . but never cheap!

So as always – be vigilant and stay alert, because you deserve more!

Have a great week.

Jeff Cutter, CPA/PFS is President of Cutter Financial Group, LLC, an SEC Registered Investment Advisor with offices in Falmouth, Duxbury, Mansfield & Southlake, TX. Jeff can be reached at

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