Why I Work As An Independent Financial Advisor....And Why You Should Care
After over 15 years working for some of the world's largest financial institutions advising corporations and institutional investors on their activities in the capital markets, I decided to make a career change and put my expertise to work with individual investors.
During a short and unpleasant association with a major financial services whose activities were targeted to individuals I quickly discovered how the financial services industry is structured to the disadvantage of the individual investor. Virtually all firms in the industry are sales organizations not sources of objective advice. The products they sell are often opaque, expensive and not transparent.
In fact there are so many practices in the financial services industry that I find outrageous and unfair to the individual investor that they are a frequent topic for entries in my blog.
It quickly became apparent to me that the only way to be able to "look at myself in the mirror" each morning before beginning each workday advising individual investors was to work independently under the registered investment advisor structure. This way not only am I free to allocate the assets in the most advantageous manner, I am acutally obligated under law to act in a fiduciary manner always putting the clients interests first.
Why You Should Work With An Independent Investment Advisor:
Your investments are important, they represent your financial future. Yet many people spend less time monitoring their investments than they do in planning their vacation or shopping for a new car.
In managing your investments you can take one of three paths:
1. Do it yourself: There is absolutely nothing wrong with committing yourself to choosing,implementing and monitoring your own investments. The two books noted on the right will put you well on your path. A good simple investment strategy can be implemented rather easily with low cost fund companies or discount brokers. With discipline and a relatively small time commitment you can perform better than 90% of individual investors over the long term.
2. Work with a "full service " broker or bank "investment advisor". While there are no doubt many talented people at these firms, these organizations are structured such that the clients interests are seldom put first. Their representatives tend to recommend expensive investment vehicles, often give preference to funds associated with their firm . Almost everytime I see a statement from a prospective client currently with a major brokerage firm, almost all the funds are from the brokerage firm itself and have higher fees than the lower cost alternatives. Your "advisor" seldom has intimate knowledge of you investments he devotes most of his time to "gathering assets
3. Work with an independent registered investment advisor. Ideally such a person should operate without earning any commissions from any mutual fund, hedge fund other type of asset manager or insurance company.His only compensation should come in the form of fees that come only from you, the client. There should be total transparency you should be able to view the positions and transactions in your account at all times with reporting from a third party such as the custodial broker. Your funds should be held with custodial control from a third party not the advisor. There should be liquidity : you should know that in the even it is necessar you can get access to cash from your accounts promptly and easily.
How I Work With My Clients
I work closely with my clients, getting to know their overally financial situation, their tolerance for risk and the type of relationship they seek from an investment advisor. Some like to be in touch frequently and given detailed explanation of their portfolio, others are interested only in periodic reviews. I am always available to speak to the clients. Since I am directly responsible for designing and implementing the investment strategy you won't receive a regurgitation of a mutual fund or brokerage firm report in response to you questions, you will get independent well researched information from me personally.
In my work as a fee only advisor can improve your investment results in several ways:
Monitoring costs in your investment vehicles .
Implementing strategies to reduce taxes using tax harvesting, proper positioning of assets and proper use of tax exempt bonds.
Allocating your portfolio over the full range of asset classes using the best of the 100s of index based instruments.
Rebalancing your portfolio to keep your allocation in place
But probably the greatest benefit of working with a fee based investment manager that overseas your entire portfolio is that it keeps you from becoming "your own worst enemy" to your investing results. Research in the field of behavioral finance has shown repeatedly that individual investors tend to "buy high" and "sell low" reacting emotionally to market movements to the detriment of their long term investment returns.
An independent objective investment advisor can give needed perspective and discipline to your investing. Often when clients call with an interest in making a change in their investment strategy based on emotion, my initial reaction is to tell the client that they are paying me to help them look objectively at their portfolio. While of course I follow the client's desires, I still give them feedback and perspective that causes them to look at their investments more dispassionately.
Lawrence Weinman provides personalized portfolio management with each portfolio customized in light of the clients goals,tax situation, other assets and risk tolerance. Mr. Weinman also offers consultations on a per project or hourly basis. He also provides his services to not for profit organizations and small and medium sized businesses.
Fidelity Investments is the custodian for all accounts. Clients have access to their account information on a 24/7 basis through their website.
Mr. Weinman is affiliated with the Investment Advisor Alliance, a registered Investment Advisor with the SEC. Unlike brokers, registered investment advisors are held by law to a fiduciary standard in which the clients interests must always be the highest priorities.
Our Approach to Investing incorporates the findings of the latest in academic research as well as two decades of experience in the financial markets. We focus on long term, disciplined, strategic investing with broad diversification.
We do not engage in market timing, individual stock selection, active short term trading, or make use of any leveraged vehicles or hedge funds. nor do we make use of active mutual fund managers in a chase to find the "hot manager" based on their recent performance. or the latest investing fad.
My Principles of Investing
Asset Class Investing: Index Investing Is the best strategy. By creating a portfolio of index instruments (funds and exchange traded funds) across a range of asset classes one can create a low cost, tax efficient, portfolio diversified across all major asset classes.
We present seminars on investment topics on a regular basis in the Los Angeles area and in Israel. Mr. Weinman is also available as a speaker for educational and community groups.
He is also available for an initial complimentary consulation.
Pleasecontact us for more information
Check Mr, Weinman's comments on matters financial on his blog:
A resource for debunking the investments myths peddled by the financial press and Wall Street hype and presenting rational,sensible investing approaches based on sound research and academic findings.
We provide investment management services to US citizens residing in Israel: through our partner inbest.
Our favorite books for investors. Here are 2 books that in clear language outline approaches to investments (and criticism of much of the investment industry) that corresponds to our philosophy and strategy,
Copyright 2010 Lawrence Weinman, MBA Fee Only Investment Management All rights reserved.