What is Good Advice from a Wealth Manager? Part 2

5 types of advice that you should be receiving from your advisor

By Robert J. Pyle, CFP®, CFA

Key Takeaways

·  Good advice is timely, holistic, personalized, grounded in empirical research and adheres to a high fiduciary standard.

·  Financial advice isn’t worth much if it can’t help you enjoy life, protect the ones you love and reassure you in times of trouble.

·  It’s not about making more money; it’s about having understanding the multifaceted parts of your financial life and the people and causes most important to you.

In Part 1 of this post, we explored differences between general investment advisors and truly comprehensive wealth advisors. We also walked through the five-step process that only wealth advisors are equipped to use in order to understand what makes their clients tick and serve them extremely well.

As mentioned last time, advice is cheap. But, good advice is worth its weight in gold. So, what constitutes good advice? Here are five key pillars of advice that we use here at Diversified Asset Management:

1. Good advice is timeless … and timely. At its essence, good financial advice never goes out of style. Its principles are permanent: It should be brave and true, and meant for you. At the same time, good advice must remain relevant in an ever-changing world. Your adviser should be able to help you embrace promising new opportunities and insights while avoiding the false leads and frightening challenges that are as formidable as ever in today’s markets.

2. Good advice looks at the parts … and the whole. Good financial advice helps you manage your investment portfolio and preserve or increase your wealth according to your goals. It also helps you plan, implement and manage your myriad related interests: taxes, insurance policies, estate planning paperwork, philanthropic pursuits, executive compensation, real estate holdings, business activities and more. Beyond that, what are your goals? How can you relate your total wealth to your relationships, resources and realities? Good financial advice should contain a comprehensive understanding of the multifaceted parts of your financial life and the people and causes most important to you.

3. Good advice is personalized … and persistent. Good financial advice is essential for making good decisions about your money, your interests and your life. It’s about being in a relationship with an adviser who is there for you, not only during the promising planning stages when everything makes sense, but when your resolve is being sorely tested in turbulent markets, or when life’s events or personal setbacks knock you off course. Good advice helps you find your way when you’ve been sideswiped by the unexpected and keeps you on course when seas are calm.

4. Good advice is wise … and compassionate. Good financial advice is grounded in empirical research, structured process and informed experience. That being said, financial advice is nothing if it can’t bring you joy in life, or help you protect the ones you love and reassure you in times of trouble. To provide this type of advice, an adviser must not only counsel you; he or she must be able to listen to you—really listen to you. This brings us to our most important point…

5. Good advice is in your highest financial interests, period. Above all, good advice should always and only be in your highest financial interest, even when it means the adviser must take a hit to deliver it. This is where things get particularly confusing. Around the world, various advocates (including ourselves) are pressing for legislation to govern best-interest advice. Such efforts are unfailingly met with resistance from those who would undermine this sensible ideal. As a result, the financial advice you choose will probably always call for a “buyer beware” perspective. As Vanguard Group founder John Bogle has wryly observed, “There are few regulations that smart, motivated targets cannot evade.”

Conclusion

We look forward to a world in which good advice reigns supreme. Until then, we hope you’ll be open to good advice when you hear it – the kind that sees you through turbulent times, and keeps you on the right path toward your financial and life goals. If this advice sounds a little different from the status-quo stock tips or market-timing tactics you may be used to hearing, that’s because it is.

May we offer you additional advice about good advice? We hope you’ll schedule a second opinion discovery call.

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

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