The Job of Advisor

I am attending an industry meeting this week and while sometimes these things can be a bore, this group is special: everyone in the room is a Registered Investment Advisor (RIA), which means that each of us has a fiduciary responsibility to our clients and has to register with the Securities and Exchange Commission. The group gathers twice a year to talk about what we believe our clients need from us and exchange information that helps us discover new ways to serve those clients.

Individuals choose to work with registered investment advisors for lots of different reasons. Some are too busy to manage their own financial lives, while others lack the expertise to do so and then there are those who have time and smarts, but just can’t stand the emotional ups and downs of the investment world. Regardless of which category the client falls in, the answer to what they usually want is abundantly clear: “I want to make sure that I am going to be OK!”

I know that this may sound simple, but indeed, this is exactly my experience with the folks that I see in my office and talk to on the radio, regardless of whether they have $200,000 or $2,000,000 to invest. Oh sure, the point of entry may begin with a concrete question, like “Am I using the right assets in my retirement account?”, “Which 529 plan should I use for my daughter’s college funds?”, “Do I need a revocable trust?” and of course, “Can you help me reduce my tax bill?” But any advisor worth his/her salt will use these questions as a jumping off point to gain a greater understanding of the overall needs of the person asking the questions. And the real questions underlying the first round usually are: can we retire comfortably? How much do we need to sock away to be able to retire sooner? How much can we spend during our retirement years?

The ultimate goal of a fiduciary advisor is to provide not just simple answers, but a more meaningful response. Despite how much money anyone has, he wants to feel confident that he will not run out of money and he will not need to endure too much market risk to reach his goals. In the end, most people want to gain peace of mind that the advisor who is assisting them in wealth management is going to help them get to a specific destination with a reduced level of anxiety. In the end, what the people in my industry meeting seemed to share was an acknowledgment that our job is not to “beat the market”, but to help our clients relax and help them navigate their larger financial issues. It’s a pretty good job!