A Consultative Financial Advisor

There are a variety of characteristics a successful client-advisor relationship should have. Chief among them is that the relationship must be consultative. In my practice, that involves much more than simply working together with clients in an open and honest partnership to meet their goals. Importantly, we also work hand-in-hand with our clients’ estate planning attorneys, accountants and other financial professionals. This is our expansive professional network--a talented team of trusted advisors who offer specific expertise and objective counsel when necessary.

Notably, our consultative approach isn’t limited to professionals. Although many times one spouse functions as the point person when it comes to finances, it’s imperative that both partners understand and participate in the management of the family finances. In fact, many of our clients broaden their family’s involvement by bringing their children into the planning process. Even very young children can learn something about managing the household finances, and sharing the estate planning process with adult children can be especially fulfilling.

While there’s no question that in today’s challenging market you may require the expertise and counsel of a range of financial professionals, it’s crucial that when you assemble such a team, you designate a quarterback or your personal chief financial officer. In fact, recent research from State Street Global Advisors and the Wharton School at the University of Pennsylvania found that many investors who work with multiple financial advisors without a lead advisor shoulder additional portfolio risk.

How so? Think about it. Without a consultative quarterback to foster communication and coordinate your financial plan, multiple advisors could cloud your financial picture. For example, without communication between advisors, overlapping exposures could create an unintentional overexposure to a single stock or asset class that increases your overall portfolio risk. Or, if you worked with two advisors and one underweighted small cap, while the other overweighted the asset class, you’d have an unintended market neutral exposure. Additionally, over time, your portfolio would be prone to style drift, or a critical need to rebalance might go unmet.

If you work with multiple financial professionals, we recommend designating someone like us as your quarterback or personal chief financial officer.

(Note: For a discussion of the six core characteristics--Six Cs--an advisor should have, read What Makes a Great Financial Advisor? and the Six Cs blogs on this topic.)