Professional financial advisors regularly use investor surveys and questionnaires to learn more about their clients. These tools assist with gathering useful client information, such as current levels of income, debt levels, savings, investment knowledge, risk preferences, retirement goals and so on. They provide a general framework for finding investment strategies and products that fit that client.
However, these tools have limited effectiveness, since they put the client into a general category of similar investors. According to Donald F. Morgan, Founder of Independent Wealth Connections, you must dig deeper into getting to know the client as a person to avoid creating a cookie cutter or “one size fits all” investment plan. This includes understanding their behavior in the face of different financial and investment scenarios, and creating a plan that fits them under these circumstances.
Morgan is a financial consultant who has been in the financial services field for 40 years. He employs a four-step consultative process that involves discussing clients’ financial goals, assessing their current and future needs, and analyzing their investment portfolios to help ensure proper diversification, liability management and asset allocation. Independent Wealth Connections assists clients with, and provides advice on, investments, financial planning and insurance.
It’s relatively easy to work with clients when the markets are doing well and portfolios are strong. However, it is essential to develop a true understanding of the client’s behavior and motivations during periods of market volatility. Investors can make rash decisions during these times. However, volatility can be beneficial as it removes the false idea that the markets are always stable and increasing.
Financial consultants must be teachers as much as they are investment professionals. Different people learn in different ways, which is why it’s important to know clients from a behavioral standpoint. Morgan has made client and community education a central component of his mandate as a financial professional. He will explain what is happening in a client’s portfolio and the markets, avoiding jargon where possible, to ensure that they understand and feel confident in their decisions.
“Everything comes down to the circumstances of the individual customer, such as their preferences, how they deal with different events, and even their family environment,” said Morgan. “We work hard to help people understand where they are today, what they own, why they own it, and what it means to them now and in the future.”
For more information on Independent Wealth Connections LLC, visit: independentwealthconnections.com
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly
