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What does customized, goal-based investment management really look like?

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Stocks, bonds, mutual funds, exchange traded funds, separate accounts, private equity or hedge funds? Active or passive? Fees or commissions? Sifting through all the information in the marketplace, and determining how best to support your investment goals can be extremely complicated.

As a result, for many individuals of wealth, retaining the services of a professional advisor makes sense. Of course, when investors decide to seek outside support to manage their investments, they will face an abundance of choices among firms, services and advisor compensation structures as well.

There are many aspects of service to consider when selecting an investment manager, but in our experience, we have found these components to be the most important: a goal-based investment process; independent and unbiased counsel; and an experienced, accessible team.

A critical component of the support you receive from your investment-management team is their process. The investment manager should have an established, methodical process in place to provide continual, goal-based support for the client. For example, at Waldron, our process is to, first, take the time to understand your investment objectives and the level of risk you are comfortable with. Second, we learn your cash-flow needs and time horizon, and incorporate that information into your long-term strategic allocation. Then, once we’ve constructed your portfolio, our team monitors and makes tactical adjustments to the allocation as needed, to ensure that your established goals are being supported.

We have found these components to be the most important: a goal-based investment process; independent and unbiased counsel; and an experienced, accessible team.

Another key to goal-based investment management is independent and unbiased counsel. A simple way to determine if a potential advisor is independent, is to ask if he or she is a fiduciary. Fiduciaries are unencumbered by conflicts of interest, and operate exclusively in support of the client’s goals. Your investment manager should act as such, and design your portfolio (or portfolios) specifically to meet your goals and financial needs, without any other influences impacting the portfolio design.

Whether the task is asset allocation or an implementation decision, an independent investment advisor will have a full range of options at his or her disposal, and will be unencumbered by conflicts of interest in evaluating them. Conversely, an investment manager working for an institution that offers proprietary investment vehicles may be motivated by incentives to steer clients towards his or her own, more profitable products.

Of equal importance is the investment management team that will be serving you. At Waldron, we create a customized team for each client, including a wealth counselor, an investment manager and a wealth planner, with each team member selected specifically for having the experience and skill set best suited to serve that client’s unique needs. We also maintain a client-to-staff ratio no higher than 5:1, so that we can provide concierge, high-touch service to every client we work with.

In short, when hiring an investment manager, you should be confident that they will be actively supporting your goals, and that your experienced, dedicated team will be accessible when you need them.

Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by Waldron), or any noninvestment-related services, will be profitable, equal any historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Waldron is neither a law firm nor accounting firm, and no portion of its services should be construed as legal or accounting advice. A copy of Waldron’s current written disclosure statement discussing advisory services and fees is available at www.waldronpw.com. The scope of the services to be provided depends upon the terms of the engagement.

This article was originally published in the February–April 2017 issue of Worth.

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Investing and the Economy

Disclaimer: Worth magazine is a financial publisher and does not recommend or endorse investment, legal, insurance or tax advisors. The listing of any firm in the 2019 Worth® Leading AdvisorsTM Program does not constitute a recommendation or endorsement by Worth magazine of any such firm and is not based upon Worth magazine’s experience with, or prior dealings with, any advisor. The information presented for each advisor, including but not limited to any related profile, statistical data, presentation, report, commentary, recommendation or strategy, has been provided by such advisor without review or independent verification by Worth magazine. Any such information is the sole responsibility of the advisor. Worth magazine makes no representation or warranty as to the accuracy or completeness of such information, assumes no liability for any inaccuracies or omissions therein and disclaims responsibility for the suitability of any particular investment recommendation or strategy for any person. Nothing contained in Worth magazine constitutes or should be construed as any form of investment, legal, insurance or tax advice or as a recommendation to buy, sell, hold or trade any securities, financial instruments or assets. Readers are advised to consult their legal, financial, insurance and tax advisors prior to making any investment or pursuing any investment strategy. Past, model or hypothetical performance is not indicative of future results.

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