• Inflation
In this way, an advisor can quickly demonstrate if a client is on track, and if not, show possible courses of action in a way that they can understand and agree to. This changes a “trust me” conversation to a validation-based conversation, which, ironically, can rapidly build trust. Because it is collaborative and focuses only on common key assumptions, a financial plan can typically be arrived at in under five minutes. Because it is so intuitive, advisors can pick it up with little or no training.
Technology has made it much easier to pick and choose assets that go into a retirement portfolio. As a result, people now have many choices about where to put their money and may ultimately consider the service of choosing the securities that go into one’s portfolio “a commodity.” With the growth in low to no-cost investment options, investors need better reasons to give their savings to a wealth manager. If advisors don’t offer their clients financial planning services, someone else will.
Kendrick Wakeman, CFA, has nearly 30 years of investment experience across a broad range of asset classes and has developed, built and run institutional-level risk management programs at both large and small financial institutions. Prior to founding FinMason he was a portfolio manager/analyst at Lazard Asset Management.