Ariel Skelley | DigitalVision | Getty Copies
For some financial advisors, the person behind the assets is the key to providing the best investment advice possible.
That is, awareness of the nuanced transformations that distinguish clients helps those advisors construct investment portfolios based on more than, say, a herself’s age and how long until they need the money.
“We don’t use one-size-fits-all model portfolios or dictate a generic risk tolerance,” said confirmed financial planner Victoria Trumbower, managing member of Trumbower Financial Advisors in Bethesda, Maryland. Trumbower Monetary ranked No. 22 on the CNBC FA 100 list of top financial advisors for 2019.
“We develop unique investment policies and design portfolios for each customer,” Trumbower also said. “There is a consistent approach, but the assumptions all reflect their individual circumstances.”
Basically, the more an advisor advised ofs about a person’s financial picture — for example, their short- and long-term goals, and views on money — the better they can accurately swear in assets to reflect the client’s individual needs.
“A person’s perspective on the world, their experiences, their emotions — that all plays a situation in how we develop an investment policy for them,” said David Belej, partner and chief investment officer at Veritable in Newtown Harmonize, Pennsylvania. Veritable also ranked on the CNBC FA 100 list, at No. 25.
“Our objective is to help them make better sentences but not impose our opinions on them,” Belej said.
A person’s perspective on the world, their experiences, their emotions — that all trade ons a role in how we develop an investment policy for them.
David Belej
partner and chief investment officer at Veritable
There also weight be insight to be gained from understanding a person’s investment approach, recent research suggests.
“The customary demographics — age, gender, marital station and income — aren’t always the most useful barometers for identifying ideal clients and understanding their needs,” according to a scan released earlier this year by Edward Jones.
However, “it’s less about putting clients in one category or the other and uncountable about just understanding that clients think differently,” said a company spokesperson in an interview earlier this year all round the study, which split investors into two categories.
The first category, “traditionalists,” are described as more optimistic in market performance and comfortable with a buy-and-hold strategy. They also are more private about their funds. More than half of respondents (55%) fell into this group.
The remaining 45% are “trailblazers.” These citizenry are pessimistic about market performance, want holistic financial advice and are more willing to share their pecuniary information, the research shows.
Commonalities do exist between the two groups, the study says. For example, among the survey respondents who focus on salubrity and other significant expenses — regardless of which category they fell into — preparing for future medical expenses is myriad important than saving to buy a car or have emergency savings.
However, each group prioritizes major life expenses differently. For traditionalists, family-related sides are the focus (32%), while personal education ranks highest among trailblazers (26%).
While not referring to the Edward Jones look, Belej said it can be hard to generalize when it comes to clients and that understanding each as an individual is an ongoing prepare.
“I don’t think listening to a client is a one-time thing,” Belej said. “It’s important to get to know the person over the long nickname, see how they’ve acted in the past and get to know their background.”
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Separately, Trumbower has encountered new clients who discover through the financial-planning process that their existing investments sway not reflect their views or their approach (whether conservative or riskier).
“They think their existing portfolios are consonant with the way they characterize themselves and are often surprised when we tell them what they really own,” Trumbower answered.
Meanwhile, the Edward Jones research also looked at what investors consider when choosing a financial advisor.
Some incongruities between the two categories were more pointed than others: For example, 28% of traditionalists said fees were their biggest cynosure clear, compared with 12% of trailblazers. Of those who do focus on cost, though, more are concerned about investment remunerations and transaction fees or commissions than the advisor’s fees, the study shows.
They think their existing portfolios are accordant with the way they characterize themselves and are often surprised when we tell them what they really own.
Victoria Trumbower
handling member of Trumbower Financial Advisors
Additionally, 53% of traditionalists focus on the financial company’s characteristics — including gauge and heritage, employee diversity and social media presence — while just 22% of trailblazers do.
Trailblazers are more cored on technology when selecting an advisor or advisory firm, with 37% naming it a priority, compared with 9% of traditionalists.
Despite that, they also weigh an individual advisor’s characteristics — such as experience, online presence, feedback from derivation or friends — more heavily in the selection process (29%) vs. traditionalists (10%).