Every investor has his or her own story. That statement is twofold; each investor has nuanced goals and most have experienced prior problems with investments that may not have been properly aligned with these same goals.
It takes time to learn about the specifics of an investor’s past and future aspirations. Just the same, life events can materially alter even the most carefully thought out plan. Some common themes include divorce, loss of a job, health issues, and longevity concerns when entering retirement. All of these can have a detrimental impact on a portfolio, never mind the emotional strife these experiences bring. If your investment targets feel like a moving target, you’re not alone. This is what a good financial advisor will help guide you through.
However, a much greater issue is when your investments are simply not aligned with your goals. From our experience, this is typically the root cause behind an investor seeking a new financial advisor. Aside from personal issues that can have an impact on portfolios, an investment portfolio that is misaligned with your goals is likely to be the biggest detriment to your financial success.
Most often, misalignment is a function of the investor working with a bank, broker-dealer, or insurance agent that is seeking to generate commissions. In other words, the financial professional is in these firms are paid to sell, not necessarily to advise.
What could go wrong, right?!
Furthermore, any good financial advisor must also be cognizant that financial planning is the foundation for financial situations that grow increasingly complex. It is imperative that you advisor has a deep network of skilled professionals to assist you with tax and estate planning, insurance, and asset protection. Financial professionals that don’t address these aren’t providing their clients with solutions to common problems.
Most of our new clients at SWS come to us to address one of three aforementioned issues, but our true value is addressing the three of them holistically. There are additional factors besides portfolio performance that are important to investors and it is our job to tailor a plan reflective of these nuanced concerns.
In the end, everyone has a story, and it’s our job to listen so that we know best how to help them.