More tools today than ever before

In 2021, half the consumers in America thought financial advisors were too expensive, while almost all who used an advisor said they were worth the money, according to a new survey.

MagnifyMoney surveyed more than 1500 Americans to learn if they currently work with a financial advisor, whether they’d consider getting a financial advisor in the future, or if they think they could find the same information on Google.

The survey found that 42% of respondents thought financial advisors were only for wealthy people, 38% thought the same information can be found online, and 25% thought you don’t need a financial advisor until you’re middle-aged.

When Eddie Ramos launched Freedom Advisory, LLC in 2008 as an independent financial advisory and wealth management firm, he knew he was making a strategically important market decision.

At the time, the United States was in the middle of the Great Recession, a period of significant financial upheaval in the economy that lasted from 2007 until 2009. Investors from middle-market firms to small family businesses were looking for ways to keep what investments they had afloat and rebuild them up for the future. Investors were looking for help and that personal connection.

In stepped Ramos, then a certified investment management consultant and public accountant with 25 years in the financial arena as an auditor and a financial manager at a fortune 500 company.

“I saw the opportunity to be of service to clients and to a bigger universe of investors with the option to provide financial services through a fiduciary format that back in 2008, was not as common because the wirehouses and broker-dealers were left and right,” Ramos told Advisors Magazine.

When Ramos opened the firm, there were fewer than 10,000 registered independent advisors, but by 2020 that number had grown to nearly 14,000, according to Statista.com.

The team of professionals he has cultivated over 14 years is like primary care providers. They investigate and review every aspect of a client’s financial health to determine a plan of attack to help that client meet financial goals and needs. Over time, Freedom Advisory has grown to service about 370 families with assets under management of $480 million and growing, according to Ramos.

The firm headquartered in Fort Lauderdale, Florida, with an office in San Juan, Puerto Rico, specializes in wealth and portfolio management, risk management, and estate planning. Its clientele varies and has a minimum of $250,000 to invest. Why that minimum? The firm’s research shows that most people start to seriously consider investing around 40 to 45 when they have reached certain milestones such as marriage, having children, or purchasing their first home. According to Ramos, it’s also a point in their lives when they have sufficient discretionary income to invest.

While Ramos advises everyone to start investing and saving as early as possible to take advantage of compounding interest, he also understands that younger investors often do not earn as much at the start of their careers and find it difficult to start investing.

What’s most important to Ramos is his relationship with his clients. That relationship always starts with a long and thorough conversation. Specifically, to learn the client’s goals, risk tolerance, the type of returns they seek, their liquidity constraints, and why they invest.

The discussion is also an opportunity to learn about the client’s relationship with money.

“Normally, the problem investors have is the short-term thinking clashing with the long-term planning,” he said. “But obviously, when something bad happens in the market, you’re going to be rethinking your position, and that’s where you need to be refocusing. That’s where you must go back to the long-term planning aspect and remain there,” he added.

Part of that relationship is to ensure that fiduciary responsibilities are explained to clients.

“It’s up to the firm to be upfront and disclose all the benefits of working with a firm,” Ramos said. “It’s all about disclosure and providing that statement of fiduciary commitment to the client – that we always put our client’s interest first, and then the firm’s interest,” he added.

Ramos thinks it’s just as important for potential clients to know as much about the firm and the financial advisor as the firm does about the client. Therefore, he strongly encourages clients to ask questions. For instance, if the advisor works as a team member, that will mean more resources for the same client. The client should find out if the advisor or firm has any complaints filed against them at the Financial Industry Regulatory Authority (FINRA) or with the U.S. Securities and Exchange Commission.

Investing’s paradigm shift
The digital age has changed the tools we use to invest. When Ramos started Freedom Advisory, potential investors walked into an office and met with an advisor but investing today can be done by using an app or laptop. Initially, Ramos thought digital investment apps would be a challenge for his firm. But that turned out not to be the case.

“The human touch is extremely important,” Ramos said. “Our clientele prefers to be talking to a person, a company, to a team of professionals. Even though they don’t call as often as one would think, they still know that they can call anytime and ask the questions that are, concerning to them,” he added.

The ability to invest earlier in life would be a game-changer, according to Ramos. By the time a person reaches retirement age, they would most likely be independently wealthy.

There’s also a shift when it comes to retirement, according to Ramos. People are living longer and outliving their retirement funds.

“We, suggest our clients change their attitude and remain equity owners as opposed lenders in the bond market,” Ramos said. “That would be a much better solution for them to at least maintain the capital for a longer period of time than consuming yield from fixed income assets.”

As for the people who are ready to retire but have parents to take care of and children returning home.

“It has always been either you save more, you work longer, or you spend less,” Ramos said. “You need to strike the balance and make sure that you’re going to have sufficient assets to withstand these extra expenses.”

Looking forward, Freedom Advisory is in a growth mode, and the goal is to bring on more capacity to service more clients. The firm is looking to hire two additional financial advisors and two client service personnel.

“We are very thankful for our clients. We have been working together for several years because we get to know our clients,” Ramos said. “Quite often, most of our clients are old-timers as our retention rate is some 99%.”

For more information, visit: freedom-advisory.com