How does your financial advisor invest their money?

Do you know how your investment advisor invests their money? When they recommend a particular stock, asset class or mutual fund, are they allocating a portion of their portfolio to it also?

If you don’t know, just ask. As a Registered Investment Advisor that manages accounts for individuals, trusts and corporations, I welcome the question as I typically do invest along side my clients for a many of the strategies and asset classes I recommend.

If not, why not?

Each person’s goals and needs are unique that depend on attributes such as:

  • age
  • risk tolerance
  • liquidity needs
  • short-term and long-term goals

Therefore, allocations to different asset classes and the choices within those asset classes can vary significantly across accounts. I would never suggest that everyone should own the same assets with the same allocation. But there’s no reason not to have a conversation with your financial advisor where they explain the differences in the allocation of their portfolio as compared to you and why it is different.


Ask about their broader philosophies

Maybe your relationship with your financial advisor makes asking this detailed a question an uncomfortable situation for you. If so, how about asking about broader philosophies like …

  • How is this portfolio allocation going to meet my needs?
  • Is it best to focus in on a particular sector (i.e. technology) as opposed to a standard allocation?
  • If you are picking managers and mutual funds for me, what criteria are you using?
  • How will a market crash like 2008 affect my portfolio?

Related post: What is a Merchant Cash Advance?

Avoid an asset gatherer

Many financial advisors are compensated based on the assets under management (AUM) they have. As a result, there may be a tendency to just get the assets “”in house”, offloading the management of the funds to a third party and moving on to the next “asset gathering” phone call.

By having a unique conversation with your financial advisor, you’ll get an idea of how much they understand your needs and how they have allocated your portfolio to meet them.

"Education is the key to making informed financial decisions." -- Elliot Goldberg, Independent Registered Investment Advisor (610) 999-3599
“Education is the key to making informed financial decisions.” — Elliot Goldberg

Please call me at (610) 999-3599 or click here to learn more questions to ask your financial advisor to make sure you are getting the personalized service you deserve.



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