What Kind Of Relationship Do You Want With Your Financial Advisor?
As we wrap up the year and begin planning for 2021, the answer to this question can be found in determining what kind of investor you are.
From our experience, there tend to be three main types of investors:
- The "Do It Yourself-er"
- The "Collaborator"
- The "Delegator"
The "Do It Yourself-er"
A "Do It Yourself-er" prefers to rely on her own knowledge and experience to build and manage her own portfolio.
This kind of investor also doesn't mind spending the extra time away from their job, family, and other hobbies to construct and manage her own portfolio to save money on the costs associated with having a financial advisor.
These days, there are platforms that support this kind of investor, like discount brokerage platforms or roboadvisors.
While this might be the cheapest option on the outset, DIY investing lacks some of the advantages that come with receiving professional advice and advisory services.
Good portfolio management isn't just about maximizing profits when the market's up. Equally as important, are curbing losses when the market is down, which can be difficult for an amateur, or an index-tracking robo advisor, to accomplish.
If you identify as a "DIY" investor and still want to engage an advisor, let them know what you want in terms of their advice, services, and your decision making from the get-go. This will save a lot of time for both of you.
The "Collaborator"
A "Collaborator" is an investor who wishes to work on their financial plan and their portfolio side by side with their financial advisor.
This type of investor wants to discuss their most important goals and decide on a plan of action with equal parts input from themselves as their advisor.
This is a true partnership.
Collaborators understand the value of hiring a professional to fill in blind spots when it comes to financial planning. They want to capitalize on their advisor's experience to implement financial strategies and use financial tools they might not have thought of if they were doing this on their own.
If you identify as a "Collaborator", make sure you like your advisor! Not just their investment philosophy and servicing model, but maybe you also have a little bit more in common that makes it fun to collaborate often. You want a solid relationship with your advisor, so you feel comfortable with them meeting you where you are at now AND as your life changes.
The "Delegator"
A "Delegator" is an investor who recognizes that in depth financial planning and investment management are not their areas of expertise.
Delegators value the time they recover and the confidence they get by using a professional advisor more than costs associated with having an advisor.
They would rather spend the time they get back on activities that interest them more, such as their family, business, hobbies, or traveling.
Something many Delegators have in common is that their financial situations have many moving parts.
They need more help organizing it all, seeing their plan in one place, and implementing a plan of action.
If you identify as a "Delegator", you should really trust your advisor. You've hired a professional to make decisions in your best interest, so you should feel confident in her ability to do that.
Key Takeaways
Knowing what kind of investor you are will help in establishing and maintaining a relationship with your advisor that helps both of you pursue the best outcomes for you and your future.
Since we specialize in working with educators, public service employees, and those who work in the non-profit space, we end up working with a healthy combination of collaborators and delegators. We genuinely enjoy the relationships we have with our clients.
Regardless of what type of investor you may be, use the link below to schedule an initial virtual consultation to see if our team of advisors is the right partner to help you along your financial journey.
In good health,
Tori