Michael Bischof, President of Biltmore Financial Bancorp, Inc. located in South Barrington, Illinois, shares with financial advisors and clients a unique and innovative approach to proper integrative mortgage planning techniques.
This is an abbreviated version of Carl Sheeler's Pulse blog on Linkedin, 'What is your risk vs. opportunity optics?' The purpose of this material on Optics and the presentation about the 'Business Owner Paradox are inter-related.
A recent review of a new client’s existing 529 college
savings plans demonstrated how critical it is that clients understand the services they receive in exchange for the fees they pay.
Michael Bischof, President of Biltmore Financial Bancorp, Inc. located in South Barrington, Illinois, shares with financial advisors and clients a unique and innovative approach to proper integrative mortgage planning techniques.
This is an abbreviated version of Carl Sheeler's Pulse blog on Linkedin, 'What is your risk vs. opportunity optics?' The purpose of this material on Optics and the presentation about the 'Business Owner Paradox are inter-related.
A recent review of a new client’s existing 529 college
savings plans demonstrated how critical it is that clients understand the services they receive in exchange for the fees they pay.
Discusses investment issues BEFORE investing: difference between a financial planner and an investment adviser, the investment objective, diversification and impact of fees.
Senior Financial Resources wants our clients to be informed about the world of retirement finances, and the many factors that can affect their retirement, IRAs, and the financial world in general.
Paul Comstock Partners is a fee-only investment advisory firm. Learn more about how we partner with our clients to enable them to make investment decisions they can trust.
In times of separation, it's easy to become overwhelmed by the emotional stress and overlook what's required to properly apply for a divorce. In this slideshow the experienced Perth divorce lawyers at Havilah Legal outline what you need to know.
Discusses investment issues BEFORE investing: difference between a financial planner and an investment adviser, the investment objective, diversification and impact of fees.
Senior Financial Resources wants our clients to be informed about the world of retirement finances, and the many factors that can affect their retirement, IRAs, and the financial world in general.
Paul Comstock Partners is a fee-only investment advisory firm. Learn more about how we partner with our clients to enable them to make investment decisions they can trust.
In times of separation, it's easy to become overwhelmed by the emotional stress and overlook what's required to properly apply for a divorce. In this slideshow the experienced Perth divorce lawyers at Havilah Legal outline what you need to know.
Whether traveling for business or personal reasons, it's best to always be prepared with a few common phrases in the native language. Here are some of the most common Mandarin Chinese phrases to help you navigate through a business meeting, dinner or even an international phone call.
Stop Wasting Your Money & Start Having a Better Investment ExperienceAndreas Scott, CFP®
To have a better investment experience, people should focus on the things they can control. If you follow these ten steps you will have a better investment experience.
Many investors have unfulfilled expectations. They are looking for a better solution, one that can lead to a better investment experience. What would that approach look like? How can they improve their odds of success? This presentation looks at a different way to invest.
4 active vs passive advisor insert funds flows dfa (advisor present) p. 1-3, ...Weydert Wealth Management
This excellent article contains three key graphics illustrating how average investors flow into and out of investments at the wrong times and contrasts this with the average DFA investor who remains much more consistent and disciplined.
Steve Redelsperger • Cadaret, Grant & Co., Inc.
- Risky business: How to create a better investor behavioral profile by Kellye Whitney
- October lives up to volatility reputation
- Creating tax-advantaged financial strategies (Gary Strawn, Transamerica Financial Advisors, Inc.)
Merrill Veteran Turned RIA - "What I want from distributors now that I am ind...TJ Villamil
A published article on Fund Intelligence discussing what Premia Global Advisor's founding partner, Miguel Sosa is looking for from distribution partners.
If this book were a fairy tale, perhaps it would have a happier en.docxwilcockiris
If this book were a fairy tale, perhaps it would have a happier ending. The unfortunate fact is that the individual investor has few, if any, attractive investment alternatives. Investing, it should be clear by now, is a full-time job. Given the vast amount of information available for review and analysis and the complexity of the investment task, a part-time or sporadic effort by an individual investor has little chance of achieving long-term success. It is not necessary, or even desirable, to be a professional investor, but a significant, ongoing commitment of time is a prerequisite. Individuals who cannot devote substantial time to their own investment activities have three alternatives: mutual funds, discretionary stockbrokers, or money managers.
Mutual Funds
Mutual funds are, in theory, an attractive alternative for the individual investor, combining professional management, low transaction costs, immediate liquidity, and reasonable diversification. In practice, they mostly do a mediocre job of managing money. There are, however, a few exceptions to this rule.
For one thing, investors should certainly prefer no-load over load funds; the latter charge a sizable up-front fee, which is used to pay commissions to salespeople. Unlike closed-end funds, which have a fixed number of shares that fluctuate in price according to supply and demand, open-end funds issue new shares and redeem shares in response to investor interest. The share price of open-end funds is always equal to net asset value, which is based on the current market prices of the underlying holdings. Because of the redemption feature that ensures both liquidity and the ability to realize current net asset value, open-end funds are generally more attractive for investors than closed-end funds.1
Unfortunately for their shareholders, because open-end mutual funds attract and lose assets in accordance with recent results, many fund managers are participants in the short-term relative-performance derby. Like other institutional investors, mutual fund organizations profit from management fees charged as a percentage of the assets under management; their fees are not based directly on results. Consequently, the fear of asset outflows resulting from poor relative performance generates considerable pressure to go along with the investment crowd.
Another problem is that open-end mutual funds have in recent years attracted (and even encouraged) "hot" money from speculators looking to earn quick profits without the risk or bother of direct stock ownership. Many highly specialized mutual funds (e.g., biotechnology, environmental, Third World)
have been established in order to exploit investors' interests in the latest market fad. Mutual-fund-marketing organizations have gone out of their way to encourage and even incite investor enthusiasm, setting up retail mutual fund stores, providing hourly fund pricing, and authorizing switching among their funds by telephone. They do not discourage the .
Individual financial advisory with respect to individual clients has occupied center stage especially due to the attendant effects of the global COVID-19 pandemic. Clients as well as advisors have had to react to these changes.
This is the first part of a two part presentation that will assist advisors/ individual wealth managers anticipate and react/address client management in a customised manner.
1. By Jim Parker
Vice President
DFA Australia Limited
OUTSIDE THE FLAGS
What is a financial advisor for? One view is that advisors have unique
insights into market direction that give their clients an advantage. But
of the many roles a professional advisor should play, soothsayer is not
one of them.
The Seven Roles of an Advisor
May 2015
The truth is that no one knows what will happen next
in investment markets. And if anyone really did have a
working crystal ball, it is unlikely they would be plying their
trade as an advisor, broker, analyst, or financial journalist.
Some folks may still think an advisor’s role is to deliver
market-beating returns year after year. Generally, those are
the same people who believe good advice equates to making
accurate forecasts.
But in reality, the value a professional advisor brings is not
dependent on the state of markets. Indeed, their value can
be even more evident when volatility and emotions are
running high.
The best of this new breed play multiple and nuanced roles
with their clients, beginning with the needs, risk appetites,
and circumstances of each individual and irrespective of
what is going on in the world.
None of these roles involve making forecasts about markets
or economies. Instead, the roles combine technical expertise
with an understanding of how money issues intersect with
the rest of people’s complex lives.
Indeed, there are at least seven hats an advisor can wear
to help clients without ever once having to look into a
crystal ball:
1. The Expert: Now, more than ever, investors need advisors
who can provide client-centered expertise in assessing
the state of their finances and developing risk-aware
strategies to help them meet their goals.
2. The Independent Voice: The global financial turmoil of
recent years demonstrated the value of an independent
and objective voice in a world full of product pushers
and salespeople.
2. DIMENSIONAL FUND ADVISORS 2
3. The Listener: The emotions triggered by financial
uncertainty are real. A good advisor will listen to clients’
fears, tease out the issues driving those feelings, and
provide practical, long-term answers.
4. The Teacher: Getting beyond the fear-and-flight phase
often is just a matter of teaching investors about risk and
return, diversification, the role of asset allocation, and the
virtue of discipline.
5. The Architect: Once these lessons are understood, the
advisor becomes an architect, building a long-term
wealth management strategy that matches each person’s
risk appetites and lifetime goals.
6. The Coach: Even when the strategy is in place, doubts and
fears inevitably arise. At this point, the advisor becomes
a coach, reinforcing first principles and keeping the client
on track.
7. The Guardian: Beyond these experiences is a long-
term role for the advisor as a kind of lighthouse keeper,
scanning the horizon for issues that may affect the client
and keeping them informed.
These are just seven valuable roles an advisor can play in
understanding and responding to clients’ whole-of-life
needs, which are a world away from the old notions of
selling product off the shelf or making forecasts.
For instance, a person may first seek out an advisor purely
because of their role as an expert. But once those credentials
are established, the main value of the advisor, in the client’s
eyes, may be as an independent voice.
Knowing the advisor is independent—and not plugging
product—can lead the client to trust the advisor as a listener
or sounding board, someone to whom they can share their
greatest hopes and fears.
From this point, the listener can become the teacher,
architect, coach, and, ultimately, the guardian. Just as
people’s needs and circumstances change over time, the
nature of the advice service evolves.
These are all valuable roles in their own right and are
not dependent on outside forces such as the state of the
investment markets or the point of the economic cycle.
However you characterize these various roles, good
financial advice ultimately is defined by the patient building
of a long-term relationship founded on the values of trust
and independence and knowledge of each individual.
Now, how can you put a price on that?
3. DIMENSIONAL FUND ADVISORS 3
‘‘Outside the Flags’’ began as a weekly web column on Dimensional Fund Advisors’ website in
2006. The articles are designed to help fee-only advisors communicate with their clients about the
principles of good investment—working with markets, understanding risk and return, broadly
diversifying and focusing on elements within the investor’s control—including portfolio structure,
fees, taxes, and discipline. Jim’s flags metaphor has been taken up and recognized by Australia’s
corporate regulator in its own investor education program.
For more articles, visit Dimensional’s client site at my.dimensional.com/insight/outside_the_flags
Diversification does not eliminate the risk of market loss. There is no guarantee investing strategies will be successful.
All expressions of opinion are subject to change. This article is distributed for informational purposes, and it is not to be construed
as an offer, solicitation, recommendation, or endorsement of any particular security, products, or services.
Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.