Wealthy Investors and Financial Advisors

According to STAT BANK in the Journal of Financial Planning

  • 45{030251e622a83165372097b752b1e1477acc3e16319689a4bdeb1497eb0fac93} of ultra-high-net-worth investors say friends and family are the biggest influence on helping them find a financial advisor.
  • 75{030251e622a83165372097b752b1e1477acc3e16319689a4bdeb1497eb0fac93} of millionaire investors say working with a financial advisor improves their knowledge of investing.

Both of these statistics is borne out by our experience.

Referrals are the primary means by which advisors of any kind get clients.  This is true whether it’s a doctor, lawyer or financial advisor.

A good financial advisor is an educator.  Some clients don’t care to understand the process of investing, but most people would like to understand the rationale behind the decisions that are made with their investments.  It is a mistake to think that people with a lot of money are “smart” about investing.  The fact is that the opposite if often the case.  People can accumulate a lot of money by earning it, inheriting, or via a windfall.  None of these require people to be smart about stock and bond investments.  A successful business owner, for example, may be great at building a business, but outside of that area of expertise may not know much about managing the money he has made.  However, he runs the risk of confusing success in one area with knowledge in another.  The wealthy sports star who ends up broke after he retires is a great example.

Like other professionals in law, medicine, engineering or rocket science, expertise in investing is best left to the experts.

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