Financial Literacy

Re-evaluating Firm Processes

Pivot to Stay Competitive

With an online trading platform like Robinhood, investors can jump in with any amount, for as little as $1, thanks to fractional shares. As a result, traditional financial advisor firms are increasingly revisiting the notion of insisting on a minimum investment when taking on a client.

“Although we eliminated our firm minimum of $500,000 for managed assets, my decision had nothing to do with platforms like Robinhood,” Jon Speight, CFP® professional and president of Speight Asset Management, told Advisors Magazine in a recent interview. “I am always evaluating our client offering and realized that we might be discouraging some wealthy prospective clients who either wanted to test-drive our firm with a smaller amount or only had access to a portion of their assets currently.”

Speight Asset Management, LLC is an independent, fee-only, Registered Investment Advisor based in Houston, Texas currently managing more than $80 million in assets for just over 50 client households. The core of the practice is constructing and managing investment portfolios. The firm’s wealth management strategies incorporate analytical processes to fully understand client priorities. From identifying short- and long-term objectives, to assessing resources and a client’s level of risk tolerance, the firm first gains an appreciation for each client situation before offering any portfolio-allocation recommendations.

“We spend a lot of time discussing risk, how much they’re comfortable with,” Speight said. “A lot of times people think, ‘Oh, I need to take on all this risk,’ but maybe they don’t.” Other important areas include having the right life insurance or long-term care plan, or considering long-term disability and other benefits, if a client is still employed.

speight quoteEvaluating the total financial picture before moving a client into specific investment vehicles is critical. In fact, improved messaging regarding some investment vehicles — along with more emphasis on individual risk tolerance — is something that’s needed in the financial services sector, Speight maintained.

“Much of the advertising that you see, on the financial news channels is focused on a specific fund or ETF and its return,” he explained, “and investors can too often zero in on that rather than choose a portfolio of investments that are diversified and can help them achieve their life goals with the appropriate amount of risk.”

Speight said that his firm draws upon a broad investment universe. All client assets are custodied at Charles Schwab & Co., Inc., giving his firm the ability to choose from thousands of top-tier investments.

Speight knows Schwab well having worked at a branch in Houston for several years. However, it was Fidelity Investments that gave him his start right after graduating college in 1991. He recalls having great experiences at both companies but neither gave him an opportunity to provide a deeper client experience. This opportunity came in 1998 when Speight was offered a position with an independent RIA firm in town. This, along with his experience working with clients at another firm in town for over a decade, gave Speight the confidence that he could strike out on his own.

Today, only 24 percent of U.S. millennials demonstrate the most basic financial literacy, according to the National Endowment for Financial Education.

“The importance of financial education can’t be overstated,” Speight said. “Every American child should take at least two financial education courses before they graduate high school to teach them the value of money, the value of saving, about spending — and just making better financial decisions early in life.”

Speight thinks such a financial literacy minimum requirement would result in more people making informed decisions related to their finances — putting them in a much better position to be financially independent.

For more information on Speight Asset Management, please visit: speightassetmanagement.com

 

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