What You Should Expect From Your Financial Advisor

In the realm of investment advice, value is defined by what you receive from your advisory relationship that meets or exceeds your expectations, for the fees paid. With most clients, it has much less to do with pricing or investment performance than it has to do with the fulfillment of promises and commitments made at the outset of the relationship. But the commitments will only have value if they are based on your clearly defined and thoroughly discussed needs, expectations, and goals. You know you’ve found the right financial advisor when the advisor’s process includes, at a minimum, these five elements:

Assessment of Your Financial Situation and Goals
The initial meeting must consist of a thorough assessment of your current financial situation in view of your most important goals. It is here where you and your financial advisor must have a frank and in-depth discussion of what you want to have happen now and in the future based on your values, beliefs, and priorities, all of which sets the course for developing and implementing your financial plan.

Establishment of Long-Term Investment Objectives
Having a clear understanding of your financial goals, your financial profile and your risk profile, your advisor should establish well-defined benchmarks that form the basis of your ongoing investment strategy that will help guide you on your choice of a risk-versus-return strategy.

Development of Your Asset-Allocation Plan
With your benchmarks in place, your advisor should formulate an asset-allocation strategy that reflects your risk/return requirements. This involves identifying a mix of investment vehicles within asset classes with the potential to generate the returns dictated by your benchmarks with an acceptable range of portfolio volatility.

Implementation of the Selected Strategy
With your asset allocation in place, the work begins on constructing your portfolio using select institutional asset-class
investments to achieve optimum diversification. Institutional investment strategies provide exposure across multiple
sectors and geographic regions at reasonable cost/fee-versus-risk-versus-expected returns.

Monitoring and Shifting Your Portfolio
With a sound investment strategy based exclusively on your personal benchmarks in place, there is little reason to track your investments daily, weekly, or even monthly. Instead, you and your advisor should establish regular intervals to review and measure progress and adjust your plan based on any changes in circumstances.

Your financial advisor should clearly explain and document the detail in these five steps. In addition, both his/her and your responsibilities require clear definition. An understanding of the services to be provided in the firm’s engagement agreement is vital to a long-term successful relationship. The client-advisor relationship is defined in large part by an advisor’s ability to provide impartial advice via a fiduciary standard. This fiduciary standard always includes the ability of an advisor to act in your best interest and to fully disclose their compensation and potential conflicts of interest. A successful advisor engagement will be the natural outcome when an honest and open ongoing discussion is the chosen format from the beginning.

MD Wealth Partners, Inc.: A personal wealth enhancement boutique for select clients.
mark@mdwealthpartners.com
mdwealthpartners.com
805.402.8642