After working in environments ranging from an insurance agency to a discount brokerage firm I have found that every investment vehicle exists because it makes perfect sense in someone’s world. As an advisor I feel that it is my roll to learn about my clients to properly partner them with the correct strategies. This combined with proper asset allocation, security diversification, rebalancing and continuing conversation may help keep clients on track with their goals.
Investing vs Speculation
Speculation is purchasing an asset with the expectation of a gain over a short period. Investing is selecting securities based off timelines, goals, risk tolerances, historical date and security fundamentals. My goal is to help my clients invest in their future, not to try to time markets for short term gains.
Client investment goals are as diverse as clients themselves. My goal as a LPL financial advisor is not to tell you what I think of your current retirement or savings plan but to find a solution that may help meet your concerns. Typically investment portfolios work towards the following:
Capital Appreciation strategies employ securities which have the potential to grow in value.
Income Generation strategies employ securities to produce a consistent stream of income and are less concerned with them appreciating in value.
Tax Conscious strategies usually have a secondary underlying goal. However, the main concern is mitigating the level of taxes you would pay.
Risk Aware strategies are more concerned with managing downturns rather than capitalizing on the upside of the market.
Cost Effective strategies usually have a secondary underlying goal. However, they are less likely to employ more expensive active managers to keep the total cost of the portfolio down.
Estate Transitioning strategies are all about getting your current wealth to the next generation. These include college planning, charitable giving, trusts, or simply making sure your loved ones have enough money.
ESG strategies allow clients to invest while avoiding companies that fall outside their moral or ethical spectrum. These concerns can be environmental, religious or want to invest in companies with strong board governance.
All money comes with attached risk. While you may not believe it, even your checking account can be susceptible to inflation risk. However, when it comes to portfolios, market risk is the most common one that comes to peoples mind. My goal as a LPL financial advisor is to integrate the time horizon for the investment with a client’s loss aversion and market sentiment. Theses break down into the following five categories:
As a LPL financial advisor if I didn’t employ financial managers, I would be doing you as a client a disservice. Institutional managers have large teams of analysts and portfolio managers who are specialized in specific asset classes. These teams are much better at identifying opportunities and managing risk on a daily basis than I could be as a financial advisor helping clients with many unique goals. A large part of my job is finding portfolio managers that meet a client’s goals and risk sensitivity.
There are literally several 1000 mutual funds, etfs, stocks, bonds and other securities in the world. While I may not personally trade many accounts or decide on allocation weights, I do spend much of my time in webinars, going to educational events and reading investment philosophies of individual managers. All of this goes into deciding the original investment options as well as looking for idea to improve your current holdings.
Financial health is a real thing. If you go to your dentist twice a year for a teeth cleaning and checkup, why wouldn’t you meet with your financial advisor to keep me updated on what’s going on in your life! This input helps me make better recommendations for your portfolio going forward as well as introducing you to additional strategies that may benefit a change in your life!
Portfolio management is just a part of what I do. There are many other questions that will arise during your life that have financial implications. Whether this is saving for college, securing income, collaborating with your employer retirement plan, evaluating your life insurance or anything to do with building your financial health, that’s what I am here for. Remember my goal is your piece of mind.
There is no assurance that the techniques and strategies discussed are suitable for all investors or will yield positive outcomes. The purchase of certain securities may be required to effect some of the strategies. Investing involves risks including possible loss of principal.