It is interesting to see what clients have looked for in an investment advisor over the decades. Typical investors have had several financial relationships over the years by the time they are nearing retirement age. Investors in this age group tend to ask questions regarding methodology and longer-term investment results. They have frequently been sold limited partnerships or variable annuities, both of which paid large commissions to the persons selling them and locked the purchasers into these investments for many years. I operate on a fee-only basis, meaning I do not earn commissions from product sales.
Reviews of client accounts show that the combination of mutual fund allocations bolstered by individual stocks that I have used over the years have enhanced longer-term rates of return for clients. While I am comfortable with this approach, I do understand some advisors are uncomfortable selecting individual stocks for client portfolios. My personal family net worth is allocated similarly to the investment portfolios held in client accounts.
Years ago, when working for Merrill Lynch in Bellevue, I had a client move from the Seattle area to the East Coast due to a job transfer. He told me he was going to move most of his assets to a local advisor in the new town as it was important to him to have face-to-face meetings during the year. He used the new, local firm for the majority of his investment holdings, leaving a small retirement account with me. This set-up remained unchanged for two decades. We had an in-depth discussion regarding his entire portfolio in 2011 in which he noted that he had “fired” the East Coast advisor over large declines in recommended investments during the downturn. The client pointed out that he was happy with the performance of the small account left with me. During the 15 months following this conversation, the client moved an asset base of seven figures back to my management. He also noted that he now placed less importance on face-to-face meetings and more importance on account results and personalized customer service. The client still lives out of state but is happier to have me manage his money across the country rather than looking for another local advisor.
Younger clients often are unsure what to ask of a prospective advisor. They know they need an experienced professional to help them manage their finances for the long haul but are unsure whom to trust. They often gravitate toward someone with whom they have a personality fit, but don’t ask probing questions regarding account returns and firm performance.
We hope our clients all enjoy working with us, and we strive to create a friendly, comfortable atmosphere in which questions are always welcome. Our main goal, however, is to see client accounts grow. Our focus is on providing clients with the returns they need to fund the retirement, business project, child’s education, or any other goal important to the investor. Our job is to help you have the financial reserves necessary to fund your personal dreams.