The goal for most investors is financial freedom – being able to live the life you want without being stressed about money. But when a majority of investors start their search for a financial advisor – the person who they will trust with their hard-earned money, their future and their financial well-being – they first look at the big, brand-name firms they have heard of before in advertisements or by others. Believe it or not, this can be a huge mistake.
Think about it: The only thing a brand-name means is that the firm has a massive marketing budget. Should that matter when it comes to your future?
Here is what investors should know about working with a small, independent firm.
The Ability to Provide Specialized Help as Needed
There are endless advantages to receiving more personalized, individual service and attention that a smaller firm like Financial Freedom can provide. However, some of our potential clients have asked questions regarding Financial Freedom’s ability to provide a wide array of specialists to assist with the financial planning process, such as attorneys and CPAs.
These are certainly valid questions, and we would like to make you aware of what plans and relationships Financial Freedom has in place to address and eliminate these concerns.
Financial Freedom has developed a strong team of specialists, and we have ongoing working relationships with the following specific professionals:
- Estate Planning Attorneys
- Certified Public Accountants (CPAs)
- Long Term Care Professionals
- Fidelity Investments and Other Leading Financial Services Companies
- Local Banking Professionals
Once we have completed a comprehensive financial plan, we coordinate a client’s requirements with these professionals’ services to ensure complete and effective implementation. One of the major advantages of this team approach is that Financial Freedom can act as the “quarterback” of your financial plan while matching your specific requirements with the right professional. In addition, we monitor the products and services that are offered to our clients and we provide each of our clients an estimate of the fees that each professional may charge. In many cases, if desired, we actively participate in the meetings with you and the other professionals.
Because not all clients have the same need for professional skill levels and their associated costs, we have developed relationships with more than one professional and are therefore able to offer estate planning and CPA skill levels that fit each client’s specific requirements.
Think you can find that much attention to detail from a large conglomerate? We think not.
In fact, we believe that a smaller firm like Financial Freedom combined with the right specialist at the right time actually provides investors better service to meet their individual needs.
Know Your Financial Planner
At a small financial advisory firm, you have a better chance of knowing who specifically is handling your finances. For example, at Financial Freedom, we do not believe in “handing off” clients, and quite frankly, we want to work with each client directly. We want to meet directly with our clients at their kitchen table, their lake house, their beach property or wherever is convenient for them.
When you call or send an e-mail, it comes directly to us. No one else is answering the phones or responding to e-mails other than us. When you call, we don’t need to ask you for your account number, Social Security number or magic password because we know you.
When working with a small firm, you are also able to ask specific questions of the actual advisor who is working on your portfolio or financial planning opportunities.
Smaller Firms Can Equal Higher Standards
Working with a small financial advisory firm can also help ensure you work with an acknowledged fiduciary. Fiduciaries are held to the highest standards and are obligated to put their clients’ best interests first. Fiduciaries can not sell a product to an investor unless it is in the best interest of their client. This eliminates the chance of a conflict of interest, such as commissions for recommending a specific product regardless of a client’s situation.
One of the most common investor misconceptions is that big, name-brand firms are better. But the truth is, some of the biggest firms on Wall Street have paid more than $100 billion in fines for cheating or misleading clients.
Also, large firms have a lot of overhead, and those costs trickle down to clients.
When working with a large firm, investors must also understand that the executives often have to meet shareholder expectations for growth. Executives may want bigger bonuses and don’t have any meaningful consequences for poor performance – if salespeople are making sales (whether a product or recommendation is good for a client or not), many times, a large firm is happy, because sales equal money.
Why Don’t Investors Hear About This?
Smaller firms understandably so have smaller marketing budgets than many of the big-name, Wall Street firms. Therefore, many of these small firms spend most of their time and money advising current clients; not promoting their brand. Because of this, new clients often come in as referrals.
Financial Freedom wants to educate investors on the benefits of working with a small, independent, fee-only firm, where there are no conflicts of interest, no hidden agendas and no buried fees. Contact us to see how Financial Freedom can help you plan for a better tomorrow.