By Al Emid, via Iris.xyz
Many conversations about the advisor-client relationship focus on the rate of return delivered by the advisor on your investments, or on the fees charged, and other definable and measurable considerations.
And that is most legitimate and understandable. However, these considerations — including the fees — are only part of the total picture. The ‘other’ investment is your time, and you may want to consider investing more of that in your relationship with your advisor.
This would always be important but has become arguably more so in 2019. This year is shaping up to be one of the most volatile, stomach-churning, awake-at-night in recent memory, a reality that underlines the need for sober and professional investment judgement.
Having interviewed upwards of 250 advisors over a period of 20 years, I can suggest several measures for consideration.
Online trading has its advantages: you can save money, enjoy the independence, revel in the control and experience the satisfaction of any do-it-yourself activity. However, as with your other investments handled by an advisor, online investments are likely to be more volatile than ever this year. It will make for more effective wealth management if you ensure that your advisor is aware of your activities and stock selection. If you are doing online trading outside of your relationship with your advisor, he/she needs, at least, a general idea of whether you are trading in risky, growth or value stocks.
And for good reason. After the first one or two meetings, your advisor most likely suggested that a certain proportion of your funds be placed in value stocks, growth stocks, emerging market stocks and other asset types. If you trade in growth stocks in your online holdings that will skew the total proportion in growth stocks higher than might be advisable for your age or financial position. If your advisor knows that you are trading online in growth stocks, he/she can adjust your asset allocation appropriately.
In this scenario, draw a parallel between your medical health and your financial health. In order to have a comprehensive picture, your family doctor needs to know about any and all treatments and medications prescribed by other medical practitioners.
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