Don’t Settle for Cookie-Cutter Advice

Many large financial services firms struggle with providing financial advice to their thousands — and, in some cases, millions — of customers. It can be nearly impossible to provide personalized financial advice to so many people. One way some of the largest investment and advisory firms attempt to overcome this problem is to make several “model” portfolios ranging from conservative to aggressive. This way these portfolios can be centrally managed and the “relationship manager” can deliver the appropriate model to each client based on a risk profile they are asked to complete.

I would submit that being placed into a box and receiving the same exact advice that everyone else with a similar risk profile is not ideal. We have been meeting many people who had been paying a high fee to their “money manager” who simply put their money in one of the firm’s models. If all you are getting from your investment firm is investment advice, then you may not be getting your money’s worth. If you work with a certified financial planner you should expect to get ideas on lowering taxes, assistance with the creation of an income plan, ideas on how to reduce the risk in your portfolio as you get older and your risk tolerance changes, as well as strategies related to asset protection and estate planning.

Your adviser should be intimately familiar with the personal circumstances of you and your family so that they can deliver advice that is customized to your personal circumstances. Additionally, you and your financial adviser should be communicating regularly so that they are aware of any changes to your financial picture, such as a change in marital or employment status, state of residence, the receipt of an inheritance, the sale of a property, or a change in your desired estate planning wishes. If your investment firm isn’t providing these services, you should find one that does.