Steal these smart analogies to simplify planning for clients

A rollercoaster with the people in an upside-down loop at sunset

At a certain point, financial planning concepts become old hat to advisors. But those advisors run the risk of using complex terms that can confuse or even alienate their clients.

Thank goodness for the analogy.

A good analogy can help financial advisors break down difficult-to-understand topics to keep clients (or prospects they're trying to close) in the conversation.

Last week on Reddit, advisors bandied about their favorite analogies. There were some gems, like this one from user jasonsimpsoncfp on helping clients resist the temptation to become reactionary: "Your portfolio is like a bar of soap. The more you touch it, the smaller it gets."

Financial Planning reached out to advisors across the country to gather some more great analogies. They cover a wide range of topics, from explaining the basics of financial planning to understanding volatility and the importance of diversification.

The selections below have been lightly edited for clarity and length.

Don’t just load up on stuffing

Lillian Turner, founder of Daring Greatly Wealth in Scottsdale, Arizona

"Leaving your retirement plan with an old employer is like leaving your wallet at an ex-boyfriend or ex-girlfriend's house. Someone you're no longer with has control over your money, and they can choose to pick it up and move it at any point without your permission.

"This often lights a fire under a client's butt to figure out whether to roll the account into their new 401(k) or transfer it to a rollover IRA."

Is it cold in here? No, it’s just you

Jeffrey Judge, managing partner at Chesapeake Financial Planners in Forest Hill, Maryland

"Managing your portfolio is like managing the temperature in your house. You don't adjust the thermostat every time it's cold outside. You set it once to match what you need, check it seasonally and adjust when your life changes — not because the market changed, but because you did.

"I had a client in early 2022 who called me ready to go all cash. The market had dropped, the news was loud, and he wanted to do something. I asked him: 'Has your goal changed? Has your timeline changed? Has anything in your actual life changed?' The answer to all three was no. We went back to the thermostat. He stayed invested. By the end of the year, he'd have been worse off in cash."

It’s all downhill from here

Zach Bachner, Summit Financial Consulting in Sterling Heights, Michigan

"A lot of our clients view reaching retirement as the ultimate financial goal. However, just like reaching the peak of Mount Everest, reaching retirement is only half of the journey. The descent down the mountain must be survived as well, just like your financial plan needs to survive the spending of your retirement needs.

"We have read in the past that the descent down Mount Everest may be considered even more difficult than the initial climb because people do not fully plan the return journey and just expect it to be easy. We see clients with a similar mentality toward retirement as they just expect their money to last even though they do not have a specific or detailed plan to confirm it."

Ride the bull? Pedal to the metal?

Jaco Jordaan, a wealth manager at Riverchase Wealth Management in Upper St. Clair, Pennsylvania

"Many years into this bull market, I run across prospective clients who are taking excessive portfolio risk. The bull market has rewarded them handsomely, and as a result of hindsight bias, they don't see what they are doing as risky.

"I use the analogy of driving a Ferrari at top speed to a town that should be two hours away. You make it in one hour without any tickets or accidents. Does that mean there was no risk? No, you could have easily landed in jail or worse. Most clients can relate to such a drive being risky, and they can make the connection to an overly aggressive portfolio — just because we haven't had a significant equity downturn doesn't mean they are not taking excessive risk. Maybe it's time to start driving the speed limit with a diversified portfolio.

"As clients move through different life stages, I'll use this automotive analogy to talk about reducing risk in their investment portfolios. Motorcycle riders tend to be younger, single and willing to take the risk for the thrill. But as soon as they get married, and especially once they have kids, responsibility outweighs the willingness to take risks, and maybe they get rid of the motorcycle for a safer sports car. As they get older, they no longer feel the need to drive fast, and so they may trade in the sports car for a sedan. In the same way, when you are younger, you can take the risk and invest more aggressively. As you approach retirement, it's time to trim risk in the portfolio to the sports car, and as you enter retirement, it may be time for the sedan."

You wouldn’t jump off a roller coaster!

Maria Castillo Dominguez, founder of Valoria Wealth Management in Hollywood, Florida

"When you get on a roller coaster, your expectation is not that the ride will feel smooth the entire time. You expect ups, downs and moments that feel scary, but the plan is still to stay in the ride until it ends.

"Investing in the stock market is often the same. Temporary market declines are part of the experience, not a signal to abandon the plan. When you start investing, you should have a 'destination' in mind, whether that is buying a home, early retirement or another goal. And if you have a destination, it's easy to create a plan. Stick to your plan until the end!"

It’s a lot more than planting a tree

Kristy Jiayi Xu, founder and financial advisor at Global Wealth Harbor in San Ramon, California

"When a tree is young, the primary objective is growth. It requires time, consistency and the ability to withstand occasional storms. I use this to explain the accumulation phase of investing, where clients typically have a long investment horizon, are contributing regularly, allowing compounding to work over extended periods of time and accepting that market volatility is a natural part of the process.

"As the tree matures, the focus gradually shifts from pure growth toward preservation, stability and sustainability. Eventually, the tree is no longer simply growing for itself — it begins producing fruit. I use this to illustrate retirement planning and portfolio distribution strategies: Over time, the portfolio should evolve to support lifestyle needs and retirement income while remaining healthy enough to continue growing for future years.

"I also use the analogy to explain the risks of reacting emotionally to short-term market volatility. If someone continually digs up a tree to inspect the roots every time growth appears slower than expected, they risk damaging the very thing they are trying to cultivate. Similarly, investors who repeatedly make emotional investment decisions based on short-term headlines often interrupt the long-term compounding process that wealth building depends on."

This one is personal

Shane Tenny, managing partner at Spaugh Dameron Tenny in Charlotte, North Carolina

"Financial planning is like hiring a personal trainer. Each New Year, thousands (or millions) of us make resolutions to get healthy. Many people buy equipment. Some sign up for gym memberships. But within a couple months, the Peloton is holding laundry or the gym membership is just a forgotten line item on your bank statement.

"But when you hire a personal trainer, you suddenly have a level of accountability and a relationship that makes a difference. Sure, it may not be as cheap as Planet Fitness, but it's exponentially more effective at helping you reach your goals.

"In the same way, buying a mutual fund, signing up for Monarch Money or committing to save more are all good practices. And some people have the discipline to make progress. But having a personal relationship with a CFP is the best bet to really help you implement the mindset, behaviors and skills necessary to reach your goals.

"If I'm feeling cheeky, I love the phrase, 'If all it took was good intentions, we'd all have six-pack abs!'"

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